HM Revenue and Customs (HMRC) has published guidance for software developers on the use of generative AI (genAI) in software products that support the submission of tax returns and other information to the HMRC.
This guidance is aimed at commercial tax software providers and sets out what HMRC believes is the appropriate use of genAI in tools used by taxpayers.
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HMRC recognizes the opportunities this technology offers and says it will “encourage the innovative use of AI in tax software products”.
However, he stressed that tax software using genAI must be transparent and developers must ensure that users know when the software is “enhanced by generative AI.”
Users should also be aware of its capabilities and limitations.
Additionally, the department expects tools to help prepare tax returns, including those that generate information to help users file accurate returns, to rely on “high-quality and reliable” data sources.
HMRC specifies that these data sources include the latest HMRC guidance, legislation and case law.
The guidance also emphasizes that systems must remain under human control.
The software should prompt users to review the results generated by the AI, especially in “areas involving sensitive tax rules, complex scenarios, or specific guidance,” and remind users that they are responsible for the accuracy of their returns.
HMRC stresses that software “should support, not replace, human judgment”.
The department also identified security as another key requirement. HMRC notes that these tools may handle “sensitive personal, commercial and financial data” and expects strong data protection and privacy measures.
