A recent survey showed that almost 60% of UK taxpayers said that they would be prepared to use AI tax advice to help them complete their Self-Assessment Tax Return.
The same research, by Taxfix, indicated that almost half of 18 – 24 year olds now look up tips on social media such as TikTok and You Tube for information on tax filing, compared to just over a third who said HMRC was their main point of reference.
Perhaps unsurprisingly, self-assessors in the age 55–64 age bracket were found to overwhelmingly trust HMRC over social media.
As a leading firm of accountants and business advisers in the North West, at Cowgills we recognise that AI is a useful tool in the modern world.
However, where tax is concerned, even small mistakes can carry serious financial and legal consequences and recent examples demonstrate that reliance on AI alone can lead to expensive mistakes!
AI chatbot ‘invented’ legal cases in appeal against HMRC
In July 2025 in the case of HMRC v Gunnarsson, Mr Gunnarsson represented himself in an appeal against HMRC where HMRC were seeking to claw back a £13k Self-Employed Income Support Scheme (SEISS) grant.
When preparing his case, Mr Gunnarsson relied heavily on arguments drafted by an AI chatbot, which provided ‘convincing’ case law to support his argument.
The tribunal quickly discovered that the case law cited did not exist and the judge dismissed the appeal, criticising Mr Gunnarsson for taking short-cuts.
Along with the embarrassment of presenting an argument based on fiction, Mr Gunnarsson lost the £13,000 claim.
Luckily for him, the judge did not find him to be “highly culpable” as, not being appropriately trained or qualified, he “may not have understood that the information and submissions presented were not simply unreliable but fictitious”.
However, parties to tax cases in the future may not be treated as leniently and the judge warned that “in the appropriate case, the Upper Tribunal may take such matters very seriously.”
More evidence of the unreliability of AI
This case comes amid growing concern over the use of AI in legal proceedings. Here are two more recent examples which highlight the danger of reliance solely on AI.
Although not a tax related case, earlier this year, junior barrister Sarah Forey was accused of citing fictitious cases at the High Court. The judge said it was “improper”, “unreasonable” and “negligent” to present fabricated cases, and Forey and her instructing solicitors were ordered to pay wasted costs.
In another case involving HMRC, Mr Bodrul Zzaman, a father appealing a £2,500 child benefit charge used AI to build his defence.
The tribunal dismissed his arguments as irrelevant, and the judge noted that the case “highlights the dangers of reliance on AI tools without human checks to confirm assertions the tool is generating are accurate”.
Our thoughts
There is no doubt that what AI technology produces can appear impressive in its articulacy and how convincing it sounds, but as the instances above demonstrate, its sometimes baseless content is repeatedly being exposed.
In the world of law, accounting and tax this can be particularly dangerous.
AI models have been proven to cite incorrect tax rates, fabricate passages from HMRC manuals and ‘make-up’ fictional case law and for someone who is not an expert in the field it is almost impossible to tell the difference between what is fact and what is nonsense. You may have noticed it isn’t that good at basic math either! Another worry when turning to AI to make financial decisions.
Of course, looking at AI as a starting point can on occasions be helpful, but the source of the information you are getting must always be checked out. A fake or badly prepared argument can lead to very real losses and AI tools are not trained to understand the complexities of UK tax law compared with experts who work, day in, day out, in the sector.
At Cowgills we could recommend that you seek professional advice, and if you need our help on anything tax related get in touch at enquiries@cowgills.co.uk
