This year’s CTA address, on the subject of tax and artificial intelligence (AI) was fascinating. Ever since ChatGPT emerged on the scene about 18 months ago people have been waking up to the endless possibilities, to say nothing of the threats, that AI will open up within the tax system. The initial buzz of excitement has subsided and we are starting to get to grips with what it will all mean.
What struck me most when listening to the discussion was that AI is so much more than ChatGPT. The examples quoted of how AI had turned days of work analysing data for a due diligence assignment into a two-minute process was little short of breathtaking – particularly as this was not a theoretical exercise but had happened in a real client situation.
There is a huge contrast here between the AI world, where incremental increases in capabilities can happen in a matter of months, and the slow and painful progress towards the introduction of making tax digital (MTD) for income tax. Increasingly it seems to me that, even assuming for the moment that it comes in on time and works perfectly, MTD will come to be seen as clunky and old fashioned. Some of the developments in instant analysis and real-time automatic reporting of transactions do seem to offer real possibilities for improving the effectiveness of the tax system for taxpayers and HMRC alike. At the very least these are surely the sort of things that should be being looked at.
My concern is that once MTD does get (stagger?) over the line, there will be no appetite to look afresh at the potential use of AI within the tax system. That would be a lost opportunity.
If you do one thing…
See the updated guidance in Enquiry Manual EM6070 on penalty abatements for disclosure. Some minor modifactions have been made.