Freelancers, sole traders and landlords are using artificial intelligence (AI) to help with their self-assessment tax returns – and use is expected to grow.
A 2026 survey conducted by Starling Bank found that one in five sole traders use AI for tax and accounting support. Alongside this, a quarter have used an AI platform for guidance about Making Tax Digital (MTD).
Although AI can cut your admin time, there are risks you need to be aware of before using it.
Here Which? explains how best to use AI with your self-assessment, where not to use it and how you can make sure you are paying the right amount of tax.
Can I use AI for my tax return?
Yes, you can use AI to help with your self-assessment tax return. It can be very helpful for things such as sorting receipts and explaining jargon, as well as basic record keeping.
However, AI can easily miss the mark when interpreting the nuances of the UK tax system. Common mistakes AI can make include miscalculating deductions, tax allowances and reliefs, mishandling payments on account, and failing to process complex business income or multiple sources of income accurately.
Using AI doesn’t change your responsibility to make sure your tax return is accurate. HMRC may fine you if there are mistakes and you haven’t taken reasonable steps to check the information you submit.
HMRC said: ‘Customers remain responsible for the accuracy of their tax return, including those who choose to use AI tools, and should carefully check their return before filing. We encourage customers to use our gov.uk guidance and our highly rated app to help them with their tax affairs.’
How are Which? members using AI?
We spoke to Which? members who have used AI for their self-assessment and tax returns in recent years to check out how they are using it.
‘It’s a useful starting point’
Which? member J White, 58, turned to AI to help her manage her late father’s estate and her own self-assessment tax returns. However, her experience was mixed.
The AI successfully worked out how much tax would be owed on savings interest earned across three specific time frames. However, it failed to spot that savings held in a cash Isa were tax-free anyway.
When helping with her own taxes, the AI incorrectly blamed an HMRC system error when locating a personal tax document. The AI failed because it did not know her personal situation. The problem was then rectified by calling HMRC. However, the AI system did tell J White the best time to get in contact, which meant she only had to wait for five minutes to get through to the helpline.
J White now treats AI outputs with scepticism:
I don’t take everything as gospel. If you’re trying to find something specific to your personal circumstances, it’s harder. It can’t be everything to everybody.
‘The things it tells you to do are perfectly understandable on paper, but then actually going into the HMRC system and trying to do what it’s told you, it sometimes just doesn’t work.’
J White says she sees AI as a useful starting point, however, she emphasises that she does not take AI outputs as absolute truth, noting that the tool is highly dependent on how a user phrases a question or prompt.
- Find out more: how to fill in a self-assessment tax return
‘Feed it as much as you can’
Which? member Chris Wilson, 39, is a marine surveyor who manages rental properties. He pays for an AI subscription to use as a daily business sounding board. For his taxes, Chris employs a fixed-fee online accountancy service to submit his final self-assessment. However, he uses AI throughout the year to estimate his liabilities.
Every quarter, he inputs his earnings, rental income and interest into ChatGPT. He uses the tool to see how pension contributions or charitable giving could reduce his bill. Chris says that the AI is usually accurate to within a few per cent when calculating his pension options.
Chris said he feeds the AI platform extensive levels of financial details to try to make sure the responses are as accurate as it can be, including his previous year’s tax return. He says this is important to do. Once his accountant compiles the official assessment, Chris uploads it to ChatGPT to check for errors.
- Find out more: tax returns 2026: important deadlines
‘Don’t blindly accept what AI says’
Which? member Robert* is a former computer programmer, very familiar with technology and regularly uses AI platforms. He used AI after a tax code change meant he had to declare his own investment interest.
Finding HMRC’s letters and online guidance unclear, the 73-year-old used it to explain the deductions and how it would work. He said: ‘ In the end, it gave me kind of answers, which made me feel more comfortable.’
However, Robert said AI was more effective for his daughter’s complex multi-country taxes. He said the AI gave ‘good answers’ which he was able to corroborate with some of the financial advice that he had already got, and successfully showed which route made her ‘better off’.
While his experience was positive, Robert warns that you must check the work multiple times. He noted: ‘never blindly accept the first answer’ adding that it was ‘remarkable’ what AI could do but it was also ‘remarkably stupid too’.
*Not real name
- Find out more: self-employed income tax, National Insurance and VAT
‘Make sure you know how to do your return first’
Retired network engineer John first turned to AI to find clarity on some unclear points with HMRC’s guidance.
Beyond basic answers, John also tasked the AI with building a custom capital gains tax calculator for his monthly stock investments. He said the AI system generated a comprehensive multi-tab spreadsheet template.
By inputting his figures, the tool calculated the exact tax due, which he said saves him the ‘laborious’ task of creating a spreadsheet manually. John felt confident in the outputs, noting that the tool saved time and seamlessly fitted into his workflow.
It also helped speed up the process, helping John complete his return in just half a day. However, he noted that taxpayers should know how to start self-assessments independently first.
- Find out more: how to calculate your tax bill
4 tips for using AI on your tax return
We spoke to Oliver Harcourt, senior director at Taxfix, a digital tax platform, to find out where AI can help in preparing your tax return:
1. Break it down into small tasks
Rather than dumping an entire cache of financial records into an AI prompt to automate a tax return, Olivier Harcourt says you should break it down into smaller steps.
For example, you can get it to create a spreadsheet of your expenses, then use it to assign standardised tax categories – such as supplies, travel, or advertising – to each transaction. Finally, you can then ask it to highlight expenses that might qualify for tax relief.
Smaller tasks work better because they allow you to maintain close control over individual parts of your return, making it much easier to spot errors and verify the information before it goes into the final submission.
- Find out more: 6 ways AI can make your life easier
2. Use AI where it excels
Oliver says AI should be utilised where the technology naturally excels. Specifically, he says that AI is an excellent enabler for research, tax education and streamlining manual processes.
Taxpayers can use it to help break down complex governmental terminology into plain english, as well as identify potential expense claim opportunities, and understand how pension contributions affect tax thresholds and relief eligibility.
Alongside this, specialised tools excel at automated data extraction, allowing you to simply take photos of receipts to import them directly into a spreadsheet rather than typing them out manually.
Focusing AI on the basic research and administrative tasks can help make the process of your self-assessment tax return a little easier.
- Find out more: can AI answer your money questions?
3. Feed the AI lots of context
To get the most accurate answers from an AI, you must proactively provide detailed background information. Oliver notes that often it ‘won’t probe for that extra information’ and instead tends to give surface-level, sycophantic responses based purely on what it is initially handed.
Missing details can completely alter your tax obligations. So you need to feed the tool extensive context regarding your personal and financial situation, such as whether you are married, have dependents, hold multiple sources of income, possess specific residency statuses, or only earned that income for a portion of the tax year.
However, while context is key, avoid entering unnecessary sensitive information such as your National Insurance number or full bank details. How conversations are stored and used varies between AI services and privacy settings, so check the service’s terms before sharing personal data or financial information.
4. Don’t let AI do the maths
Oliver warns that generic AI tools ‘are not very good at calculations’ and are prone to hallucinations. So using it to tell you the exact tax you owe and the exact relief you can get leaves too much room for error – particularly if you have more complex taxes and multiple streams of income.
You should always double-check any figures using official tax calculators and matching them against official HMRC guidance.
‘AI is not a ‘quick fix’
‘There is no “magic button” that is going to instantly finish your taxes for you. Instead, you should look at AI as a much-needed upgrade to doing a lonely, exhausting Google search, or sitting on hold for hours waiting to get through to the HMRC helpline.
‘While it is a fantastic tool to help streamline the boring admin work, you still have to put the actual effort in to get it right.
‘Be vigilant when using it, and always check the sources in the answers you get. Often generative AI platforms pull information from across the internet, which could include older out-of-date information potentially slipping through.’
