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The rise of generative AI is rapidly transforming the tax profession. A recent survey by Tolley found that over a third of UK tax practitioners are already using these powerful AI tools, with many more planning to adopt them soon. As generative AI capabilities continue advancing at a blistering pace, it's clear this technology will fundamentally change how tax work gets done. Firms and in-house teams need to act now to stay ahead of the curve.
The tax sector has been impressively quick to recognise generative AI's massive potential. The Tolley survey revealed that 9% of tax practitioners use it daily, while 35% use it at least monthly. Another 32% plan to start using it soon.
“We are only at the foothills of what GenAI can do and how much of the tax professional's compliance and advisory work it can consume,” says Hayley McKelvey, Tax and Legal – Digital Innovation Leader at Deloitte.
Bivek Sharma, Chief Technology Officer & Head of Alliances for Tax, Legal and People at PwC agrees, saying AI has changed the rules of the game by enabling “unprecedented” transformation.
Read more commentary from tax and AI thought leaders
So, what exactly are tax professionals using generative AI for? The top priorities are researching tax matters (91%) and drafting documents (87%). Communication tasks like email writing were also highlighted by 80% of respondents.
Firms see huge efficiency gains from leveraging AI for time-consuming analysis. “Generative AI can help better understand client circumstances and address any concerns,” says Moore Kingston Smith (MKS) Partner and Head of Transformation, Becky Shields.
Adrian Henderson, the Director of Technology & Transformation Services at Evelyn Partners notes AI can “spot patterns that humans cannot” to generate new business insights.
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Even smaller boutique practices plan to use AI to save time on highly repetitive tasks. “Generative AI has vast potential to drive productivity,” says Michael Beart of Larkstoke Advisors, freeing staff to focus on higher-value work.
Tax organisations are moving quickly to integrate generative AI. The survey found 32% have already made operational changes, like staff training (12%), AI usage policies (11%), and launching internal AI products (11%).
In-house teams are leading the charge, with nearly half (47%) making AI-driven changes so far. This includes developing AI policies (24%), building custom AI tools (18%), and hiring AI experts (11%).
“GenAI...means tax professionals can respond to the external environment and drive real value,” notes McKelvey.
Firms like Crowe are already using it to analyse large datasets to identify tax savings opportunities.
While excitement is palpable, 77% of tax pros have reliability concerns about public generative AI tools, primarily around hallucinations, security and the trustworthiness of the tools altogether.
Helen Whiteman, the CEO of the Chartered Institute of Taxation, says data security and privacy pose significant risks to tax practitioners.
“The lack of transparency around how AI systems operate can leave tax practitioners and their clients in the dark.”
Jane MacKay, a tax partner at Crowe, says the current AI tools for the tax market are limited by the quality of information, context, and appropriateness of research terms.
“The quality of information isn’t currently reliable enough, which can lead to ludicrous or inconsistent results if you don’t already know what answer you are expecting.”
We asked respondents how confident they would be using a generative AI tool that was grounded on tax content sources, with linked citations to the verifiable authority used to generate the response.
Almost three-quarters (71%) of respondents said they would be somewhat or completely confident using AI-powered tools grounded in tax content sources.
There's no denying generative AI will utterly transform tax work. Professionals clearly see its immense potential for streamlining workflows and generating insights. While reasonable concerns exist, firms recognise AI's value when built on trustworthy data foundations. The AI era has arrived for tax - the key is strategically adopting and training these powerful new tools to drive maximum productivity gains. Firms taking a proactive approach can secure a crucial competitive advantage.