Artificial Intelligence (AI) is rapidly changing how business works in all sectors, and the tax industry is no different.
While there are many benefits to using AI, it is important not to forget the risks and problems of this complex technology – nor should we forget the vital role of human intelligence and expertise.
A growing number of individuals, businesses, and Research & Development (R&D) tax relief providers are using AI-based tools to compile and submit R&D claims.
Unfortunately, this may result in errors, inconsistencies, and a very low chance of your claim being successful.
Instead, a specialist R&D tax consultant is needed to provide you with everything you need to maximise your client’s claim and give you peace of mind.
Here’s why AI can pose problems for R&D tax claims and why accountants should never rely on it.
Why are some people using AI to make R&D tax claims?
There are several motivations behind the increasing use of AI to make R&D tax claims.
One of the most obvious is that it’s cheap, whether you’re an accountancy firm trying to avoid consultancy fees or an R&D provider trying to cut costs by circumventing advisers.
AI makes it much quicker to draft an R&D tax claim and is also relatively easy to use – a relief for those who find the R&D tax claims process to be exceedingly difficult.
However, even though using AI might appear to reduce spending and boost productivity in the short term, it might prove costly in future.
Blick Rothenberg Partner, Ele Theochari, explained in a recent insight article for Blick Rothenberg: “Over the past four years, many very large, quantity-driven R&D providers have ceased trading due to the poor quality of their work and the number of subsequent enquiries that they are unable to defend.”
Accountants who use AI to make preparing their R&D tax claims easier risk jeopardising the future of their business.
randd UK’s R&D tax consultants can guide you through the scheme and help you prepare a robust claim.
The dangers of using AI in your R&D tax claim
There are several problems with using AI to prepare your R&D tax claim:
- The R&D tax relief system has specific requirements and nuances, which AI may not fully grasp
- AI-generated content can be inconsistent
- AI relies heavily on the data it was trained on, which may be biased, out-of-date, or irrelevant
- Accurate data fed into AI can still result in mistakes and falsehoods – “AI hallucinations” – that compromise the integrity of a claim.
On the surface, an AI R&D tax claim output may look impressive.
However, many AI-processed claims can be spotted much more easily – and a closer look will always reveal numerous issues.
Are there any benefits of using AI?
There are ways accountants can use AI to help with preparing R&D claims.
For example, AI can:
- Assist with research baselines
- Summarise complex technical information
- Manage large, complex calculations.
Nevertheless, AI cannot replace the expertise and judgment of experienced R&D tax consultants – and it isn’t perfect.
R&D tax claims for accountants can be challenging, since most firms lack the time or specialist knowledge to deliver effective claims.
We provide expert R&D help for accountants to put together robust claims that minimise the chance of HMRC enquiries.
How to help my client with R&D tax relief
Accountants working to claim R&D tax relief for their clients must not rely on AI to complete their claims.
There are ways in which AI can streamline and assist with R&D claims – but only with the oversight of an experienced R&D tax professional.
While the R&D tax relief scheme can seem complex, working with an expert R&D tax consultant can simplify the process and ensure that your claim is prepared to the highest standard.
R&D tax relief provides an excellent opportunity to access financial support for innovative projects. We’ll help your clients claim up to nine times more and ensure that you never miss an R&D claim deadline.
At randd UK, we offer accountants R&D assistance with all aspects of the relief process, from preparing a robust claim to resolving any challenges from HMRC.
Don’t get caught out by dodgy AI. Contact our expert consultants today to help your clients with their R&D claims.
