Survey: 59% of UK taxpayers plan to use AI for tax returns

A new Taxfix survey reveals that 59% of UK taxpayers plan to use AI tools for their Self Assessment tax returns ahead of the January 31 deadline, marking the country’s first truly AI-led tax season. This shift toward automated tax assistance reflects broader consumer behavior, with OpenAI research showing that 49% of ChatGPT users now primarily use the platform as an advisor rather than a task executor.

What you should know: AI adoption in tax filing is driven by practical concerns, but comes with significant risks that could lead to costly mistakes.

• Speed (39%), convenience (36%), and cost (33%) are the top reasons people turn to AI for tax help, with 79% saying it reduces stress and anxiety during tax season.
• Traditional accountant fees range from £300 to £500 for simple returns, making them inaccessible to many taxpayers who also face long HMRC hold times and poor customer service.
• However, 73% of accountants believe AI provides incomplete advice, 62% say it struggles with nuance, and 52% point to a lack of UK-specific tax knowledge.

The risks are real: Generic AI tools can lead to expensive errors when handling complex tax situations that require specialized knowledge.

• Taxfix, a digital tax platform that connects taxpayers with qualified accountants, recently helped a client who had incorrectly applied the £1,000 trading allowance instead of claiming actual expenses, which would have cost thousands due to their placement in the 60% tax trap.
• Many taxpayers lack the technical training to know what details to provide or which follow-up questions to ask AI models for their specific financial situations.
• These mistakes can result in costly penalties or missed opportunities to claim eligible tax relief.

Generational divide emerges: Younger taxpayers are increasingly turning to unconventional sources for tax advice beyond traditional AI tools.

• Nearly half (43%) of self-filers now research tax tips on TikTok and YouTube, with 58% of those aged 18-24 preferring these platforms over HMRC (36%).
• In contrast, 67% of those aged 55-64 consider HMRC an important information source compared to just 10% who use social media platforms.
• This trend is forcing accountants to work with AI-informed clients who may arrive with preconceived assumptions about their tax obligations.

The hybrid approach wins: Despite AI adoption, taxpayers still want human expertise for complex situations and peace of mind.

• 81% of survey respondents said they still want access to a qualified professional when needed, suggesting AI won’t fully replace accountants.
• Accountants can use AI internally for document management, data extraction, and anomaly detection while focusing their expertise on client guidance and complex problem-solving.
• The most effective strategy combines AI’s efficiency for routine tasks with human oversight for nuanced tax situations and compliance requirements.

Why this matters: This shift represents a fundamental change in how tax services are delivered, with implications for both taxpayers and the accounting profession as AI tools become more accessible but potentially less reliable for specialized financial tasks.