Managing AI tax risks: Resources and training

Artificial intelligence and the tax tribunals

Some of the possible risks of relying on AI have presented themselves at the tax tribunals in recent years. Typically, the largest issue has been ’hallucinations’, as can appear in generative AI models.

In HMRC v Marc Gunnarsson, a taxpayer used AI to draft his skeleton argument. To support his case, this referred to three previous first tier tribunal decisions, but they did not exist.

Felicity Harber v HMRC tells a similar story, again with invented case citations.

In Bodrul Zzaman v HMRC, an AI produced document referenced cases which did exist, but they did not provide authorities for the arguments made by the taxpayer and were generally irrelevant. This led the tribunal to emphasise the importance of human checks on AI output.

This theme can be seen again in the very recent decision of Gary Elden v HMRC, where a taxpayer’s accountants had based their arguments on AI-generated output which hadn’t been verified for accuracy. The tribunal judged pulled no punches in saying “this lack of sufficient care amounts to professional incompetence on the part of any regulated individual or firm”.

While the tribunal was not unduly concerned that AI had been used, noting that it is a powerful tool that can be used to great effect, it observed that “the human who relies on its use bears the responsibility for the accuracy”.

Once again, the importance of oversight was stressed by the judge, who commented that those who use AI to conduct legal research have a professional duty to check accuracy by referring to authoritative sources before using it in the course of their professional work, such as when advising clients.

Artificial intelligence and the professional bodies

In January 2026, the seven professional bodies responsible for publishing ‘Professional Conduct in Relation to Taxation’ (PCRT) released guidance on the ethical use of AI for tax work.

This guidance highlights that members of those bodies are ultimately responsible for any work they, their staff, and others under their supervision produce, irrespective of the use of AI tools in its creation.

This makes it essential to oversee any work facilitated by AI tools appropriately and diligently, implementing appropriate safeguards to effectively mitigate risks.

Building on that, those working under PCRT should also be able to explain and justify how a particular conclusion was arrived at, even if the work was generated by AI. This means that the reliability and suitability of output must be considered in its wider context and not blindly accepted.

The guidance points out that, in all cases, it is important to remember that outputs from AI tools should not be used as authoritative tax or legal advice. Instead, reviews should be undertaken by a qualified professional in the specific context of the client to whom the advice is being provided.

A key theme which presents itself is the importance of professional, human, involvement.

Artificial intelligence and HMRC

HMRC also published guidance on AI in January 2026, but focusing on the use of AI in commercial software products used to submit information to HMRC.

Similar themes arise: HMRC state that AI-enhanced software should be designed with strong human oversight and control built in at appropriate stages. It should support, not replace, human judgment.

Artificial intelligence and you

Of course, for humans to have effective oversight of AI output and exercise judgment, they need to be equipped with the technical resources and training to do so.

Research and verification

A number of our readers already use rossmartin.co.uk as their go-to tax technical resource. Rossmartin.co.uk has been part of the 20:20 Innovation group since 2024.

With over 1,500 accessibly-written tax guides, flowcharts, briefings and practical case studies, all actively maintained and updated in real time, rossmartin.co.uk gives you answers to tax questions and problems at your fingertips.

But rossmartin.co.uk doesn’t have to be used as a ground-up research tool.

Where AI is used at the start of the research process, its output still needs to be verified – that’s where rossmartin.co.uk comes in, complementing the work done by AI, as a reliable and trustworthy source of up-to-date tax information.

Rossmartin.co.uk allows you to perform sense checks of AI output. By confirming the existence of case law or legislation referenced by AI, you can help mitigate the risks associated with hallucinations.

In addition, rossmartin.co.uk can provide additional practical planning tips, written by Chartered Tax Advisers with combined decades of experience in practice, to ensure no opportunities are missed.

It is a great resource to build into your firm’s AI policy.

CPD and training

But it’s not all about having a comprehensive practical tax resource at your fingertips.

With 20:20 Innovation’s extensive webinar program featuring over 150 hours of topical live and on-demand webinars, you and your team will be supported in tax knowledge, shown how to grasp opportunities from AI and much more. Being equipped and trained to spot any tax errors or curveballs that AI presents is another line of defence, protecting against ‘unknown unknowns’.

With up-to-date tax expertise, you and your team can confidently approach AI’s output with professional scepticism, enabling easier identification of whether the output accurately fits the client's specific circumstances, and knowing when further research on rossmartin.co.uk is needed.

Better together

The PCRT bodies are clear that besides ensuring services are performed competently, professional members should also ensure their work is based on current developments in practice, legislation, and techniques.

Between 20:20 Innovation’s CPD program containing countless tax updates, and actively maintained technical resources within rossmartin.co.uk, together we can keep you abreast of the latest in the world of tax, equipping you to do your work, better.

Want a second opinion

20:20 Innovation’s Virtual Tax Partner (VtaxP) is an online, on-demand, tax technical support service, giving you bespoke and reliable advice, straight from the fingertips of our team of Chartered Tax Advisers.

Whether you want a second opinion on AI’s output, advice on a particular technical point, or a wider review of a client’s affairs, we’ve got you covered. Just raise a ticket, and we’ll provide you with a no-obligation quote.

Of course, there are wider risks not discussed in this blog which using AI can present. This article is not intended to be a full or complete analysis of such risks, but rather a guide as to some of the ways in which 20:20 Innovation can help. Contact us to find out more.