News | June 2026 | Developing tax software with AI? New guidelines are here

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June 2026 | Developing tax software with AI? New guidelines are here

HMRC has set out its expectations for how software developers should use AI in tax software products, as it wants to encourage its innovative use to help build products, while protecting users from any potential problems.

AI could be used to develop products to help people submit their tax returns or other information to HMRC, or to help customers with their taxes in another way. But HMRC has released guidance on what they would expect these developers to do if they are using AI to create these kinds of tools.

For example, HMRC expects developers to be transparent about whether their products use generative AI, that they only use reliable source data, which is in line with relevant legislation, and that any products are designed with human oversight and control.

WHAT ABOUT SECURITY?

Strong security is non-negotiable when it comes to any software that is used to help taxpayers with their submissions, or any other aspect of their tax affairs. HMRC insists that any software generated with or without AI is developed with ethical data security and privacy measures. This includes complying with UK General Data Protection Rules (UK GDPR).

Also, the software should clearly flag to the user if it "identifies areas involving nuanced tax rules, complex scenarios or specific guidance", says HMRC. It should also identify if there is a need to investigate further or recommend the need to seek guidance from a qualified tax adviser.

In addition to all these requirements, developers should also highlight that it's the taxpayer's responsibility to make sure their tax returns are correct.

LET US HELP YOU

If you are using software developed using generative AI, or you are interested in designing something to help people with their tax affairs, then please get in touch with us on 01709 327 215 or email info@branagans.co.uk and we will do what we can to help you.