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In chatbots we do not trust – yet

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If you or other members of staff cannot solve a tax problem, relying on ChatGPT should be the last thing on your mind – unless you want to get sued.

30th Nov 2023
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Readers of Monday’s tax newswire will have seen an Any Answers query about EMI shares and business asset disposal (BAD) relief highlighted. The subheading summarised the position as follows: “Croner tax line and my reading of the CGT rules for BAD relief and EMI schemes conclude that client can’t claim BAD but ChatGPT disagrees. Who is right?”

It is clear that the accountant asking the question is diligent, checking no fewer than three sources in an effort to find a definitive answer to an issue that is presumably exercising a number of his or her clients. This is commendable.

However, the idea that anyone with their head screwed on would rely on ChatGPT – which for the uninitiated is an artificial intelligence (AI) tool – for tax advice is laughable.

In the fullness of time, there is a reasonable prospect that AI will become a reliable, primary source of guidance for those in the profession. However, at the moment, it is merely an amalgam of good ChatGPT and bad articles drawn from sources some of which are likely to be untrustworthy.

To draw a quick analogy, if your car’s brakes stopped working, would you rely on support from a group of nerdy 12-year-olds? That is pretty much what could well be happening when you seek tax advice from ChatGPT.

Easy to make mistakes

Having spent far too long working in the tax industry, one learns from bitter experience that it is all too easy to get things wrong. After all, leading KCs and even judges regularly disagree on the meaning of badly constructed legislation, while case law is even more confusing.

As we have seen recently with the debate about whether fractional shares can be included within ISAs, HMRC might come up with its own interpretation but this will not necessarily accord with the legislation, especially if you trust the views of those who would like the answer to be more favourable to their cause.

With so much uncertainty around, the best that any of us can do is work through a number of generally accepted and reliable means to get to the best answer possible.

Sensibly, the Any Answers contributor started off by looking at the legislation, which should always be the first port of call. Presumably, either the answer was unclear or was not what they wanted to hear.

Best advice

If you or your clients are happy to pay top dollar and get the best advice, then seeking an opinion from a distinguished barrister, perhaps a KC specialising in the field, is a good idea.

Should that be a little outside your price bracket, getting help from specialists at a larger firm or, if your firm has one, the in-house expert, is likely to get the right answer in the vast majority of cases or at least identify exactly where uncertainty lies and the risk in jumping one way or the other.

A more economical approach might be to use a professional tax support line, although when compared to paying through the nose for specialist assistance from a designated firm or individual, this reduces the chance of being able to sue should the answer ultimately prove to be expensively incorrect.

You could even try calling HMRC, although there is a fair chance that nobody will answer the phone, let alone solve your client’s problem.

Conflicting answers

Most of us would probably stop somewhere along this chain. However, that is not to denigrate the quality of AccountingWEB’s Any Answers and its contributors. In most instances, they will come up with the right answer and if there are multiple confirmations of a point that can prove very comforting. Conflicting answers would clearly create an additional quandary.

Even so, I would not want to be standing up in a court of law trying to explain to a tribunal judge that the advice, which cost a client millions of pounds, was obtained in what is effectively a chat room.

Random source

That brings us on to a devious source that is currently so random nobody in their right mind should rely on it for anything that could be open to challenge.

ChatGPT and its equivalents are currently nothing more than amalgams of potentially unreliable information. While this might be quite fun if you wish to cheat in exams, write dull letters or show off to friends, if used unwisely – for example to provide interpretations of tax law – it could be the first step towards getting sued without any recourse. You have been warned.

Replies (8)

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By Justin Bryant
30th Nov 2023 15:36

The best advice is to ask an expert. See: https://www.daviddeutsch.org.uk/blog/

Thanks (3)
Replying to Justin Bryant:
Jake Smith, AccountingWEB
By Jake Smith
01st Dec 2023 11:20

Wow - that is some serious persistence from David, and some serious intransigence from ChatGPT, I wonder if my kids were involved in the answers?!

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Tornado
By Tornado
30th Nov 2023 16:43

A good place to look for answers is, of course, the HMRC Manuals which are primarily designed to provide advice to HMRC staff. If you are not sure about something, then working out an answer based on guidance in the manuals is likely to be the sort of answer that HMRC would come up with as well. It is all free information and readily viewed.

Following other lines of enquiry is also prudent in case you have missed something as the manuals do not cover everything or they may be wrong, but they are regularly updated and should be reasonably current.

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Replying to Tornado:
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By FactChecker
30th Nov 2023 19:56

I agree that the HMRC Manuals are an invaluable tool - if only to check on HMRC's likely take on the situation (or even whether they appear confused themselves).

But that's all part of assessing the degree of risk when something isn't crystal clear (i.e. most of the time), so I'd always recommend recourse to the source (legislation) as well ... ideally *before* ascertaining the HMRC perspective, so that you can read the HMRC stuff against a background of your initial understanding - and spot where their interpretation is 'innovative'.

Thanks (1)
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By SuperAccountingSteve
01st Dec 2023 09:42

The minute they can be relied upon, the consumer will cut out the middle 'man'.

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By johnjenkins
01st Dec 2023 10:04

So Mark, what's your take on this?

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Caroline
By accountantccole
01st Dec 2023 12:26

Just for clarity - it was my post. I'd drawn the conclusions from traditional sources.
The blooming client used Chat GPT and was convinced that it was right!

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Replying to accountantccole:
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By johnjenkins
01st Dec 2023 12:47

So it looks like Chat GPT has replaced the "man in the pub".

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