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HMRC sets expectations for AI in tax software

Author: ICAEW Insights

Published: 29 Jan 2026

HMRC has published guidance for developers on what good use of generative artificial intelligence (AI) looks like in commercial software products that help users to submit tax returns or other information to HMRC.

In the guidance, HMRC says that it expects tax software products that use generative AI to be: 

  • Transparent. Developers should ensure that users are aware that the software is enhanced by generative AI and that they understand the software’s capabilities and limitations. 
  • Reliable. Software that supports the production of tax returns, including generating information to support users to submit an accurate return, should use data sources that are “high quality, reliant and reliable”. This includes up to date HMRC guidance, legislation and case law.
  • Subject to human control. The software should prompt users to check the results, particularly in “areas involving nuanced tax rules, complex scenarios or specific guidance”, and remind them that it is their responsibility to make sure their tax returns are accurate. Importantly, HMRC says that the software “should support, not replace, human judgment”.
  • Secure. The software should include strong data-security and privacy measures, recognising that the tools may handle “highly sensitive personal, commercial and financial data”.
  • Ethical. HMRC’s expectations include that “the AI system is fair and trustworthy, fully accountable, and demonstrably serving the public good”. 

Guidance for members 

Earlier this month, the seven Professional Conduct in Relation to Taxation (PCRT) bodies and associations, including ICAEW, published topical guidance to help members apply the PCRT fundamental principles when using AI tools in tax work. HMRC’s expectations for software developers broadly align with the topical guidance.  

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