Artificial intelligence is becoming a practical reality for accountancy firms, not a future concept. As Making Tax Digital increases reporting frequency and client touchpoints, many practices are looking for scalable ways to manage growing workloads more efficiently. At the same time, accountants quite rightly approach AI with caution, given the sensitivity of client data and the trust placed in the profession.
Recognising this shift, the Professional Conduct in Relation to Taxation (PCRT) guidance has been updated to explicitly address the use of AI in tax work. The update does not introduce new rules, but instead interprets the existing five fundamental principles of PCRT through an AI lens, helping accountants understand how AI can be used responsibly within established professional standards.
What the updated PCRT guidance means in practice
The revised guidance reinforces that AI can support professional work, but it does not replace professional judgement. Responsibility, accountability and ethical behaviour remain firmly with the accountant.
The first principle, integrity, requires firms to be transparent about how AI supports their work. If AI assists with analysis or drafting, accountants should still understand and be able to explain the outputs clearly to clients, particularly where decisions are questioned.
Objectivity is equally important. The guidance cautions against over reliance on AI outputs. Suggestions generated by AI should always be challenged and reviewed in the context of the client’s specific circumstances, rather than accepted at face value.
Under professional competence and due care, the expectation is clear: accountants must understand the limitations of any AI tools they use. Outputs should be reviewed carefully, with checks to ensure current tax rules, thresholds and reliefs have been applied correctly.
Resources that combine automation with human review are increasingly designed to support this balance, helping accountants spend less time on repetitive tasks while retaining full oversight of decisions and outcomes (for example, Sage tools built specifically for accountants).
Confidentiality remains one of the most critical considerations. Accountants must ensure that client data is protected when using AI tools, particularly where external or public systems are involved. Uploading identifiable client data into uncontrolled environments can create serious data protection risks.
Finally, professional behaviour requires firms to consider the wider reputation of the profession. AI should be used in a way that aligns with regulatory expectations and reinforces trust in professional advice.
Moving from experimentation to embedded AI
For many firms, AI adoption starts with light experimentation such as summarising information or drafting internal notes. Over time, the focus is shifting towards more integrated, workflow based use, where AI helps flag anomalies, prioritise reviews, or streamline routine processes linked to ongoing obligations like Making Tax Digital for accountants.
The key transition point is governance. Firms that successfully embed AI tend to establish clear internal principles around where AI can be used, how outputs are reviewed, and who remains accountable. Training teams to critically assess AI outputs is just as important as the technology itself.
Consistency is another important benefit. Used well, AI can help standardise processes across clients, making reviews more efficient and reducing the risk of errors during busy periods.
Using AI responsibly as workloads grow
AI offers real potential to support accountants as regulatory complexity and client demands increase. The updated PCRT guidance provides reassurance that AI can be used within existing professional frameworks provided firms apply the same discipline, oversight and ethical standards they would to any other tool.
Ultimately, AI should be viewed as an assistant, not an authority. When accountants remain firmly in control, transparent, sceptical of outputs, and mindful of data protection, AI can help firms work more efficiently while maintaining professional standards and client trust.
