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AI and your accounts: why caution is key

Artificial intelligence (AI) is becoming part of our everyday lives, from writing emails, to answering our online queries and generating marketing ideas. It can even answer questions about tax and finance. While the technology has come a long way in recent years, when it comes to your business and personal accounts, it’s important to proceed with care.

At first glance, AI tools may seem like a convenient way to save time and money. Simply type in a question like “What expenses can I claim as a sole trader?” and you’ll be served a list of answers in seconds. Sounds useful, right?

But here’s the problem: AI doesn’t always get it right. In fact, recent reports have shown that AI platforms frequently give outdated, overly simplified or, in some cases, completely incorrect tax advice. Worse still, the answers can sound so confident and credible that it’s easy to take them at face value. AI tools used without oversight can lead to insolvency risks and HMRC scrutiny.

Why this matters

HMRC doesn’t accept “AI told me to do it” as a defence if you make an error on your tax return. Whether you're submitting a personal Self Assessment or managing accounts for a limited company, you are ultimately responsible for getting it right.

There are regular examples of misinterpreted expenses, incorrect VAT claims and incorrect tax planning advice. That’s because tax and accounting rules are complex, and they change often. AI systems are not always up to date with the latest legislation and they don’t know the specific circumstances of your business.

AI can’t replace tailored advice

A qualified accountant or tax adviser doesn’t just follow the rules—they interpret them in the context of your unique business situation. They know which allowances you’re entitled to, how to structure your income for tax efficiency, and how to spot red flags before they become problems. They’ll also consider upcoming changes and help you prepare for them.

AI simply can’t offer that level of tailored support. It can be a useful starting point for learning, or to get a rough idea of a concept—but it should never be used to make important business decisions on its own.

Use AI wisely

That’s not to say AI has no place in the world of finance. Many accountants use AI-powered tools behind the scenes to improve efficiency, automate admin tasks, and assist with reporting. But these are used alongside human knowledge and experience, not instead of it.

So, if you’re tempted to hand over your accounting to AI this year, pause for a moment. Would it be sensible to seek professional advice? It could save you a lot of stress—and money—in the long run.

For specialist advice and support contact:

📧 mc@morriscrocker.co.uk
📞 023 9248 4356 

14/01/2026