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tod-Copilot aims to reduce AI risks for tax firms


The latest tool from AI specialists Tax on Demand (tod) aims to take away some of the risks for advisers by using proprietary AI technology trained on HMRC tax guidance and manuals.

26th Sep 2023
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Accountants’ reactions to the swift rise of generative artificial intelligence (AI) such as ChatGPT range from the fearful (‘will it take our jobs?’) to the optimistic (‘it should be able to save us some time’).

While this new breed of AI tools has generated a lot of hype and attention, many accounting professionals have taken a watching brief, citing fears of “hallucinations” (mistakes or made-up statements), out-of-date information and data security concerns.

When it comes to AI’s application to tax, experts are in agreement there’s no substitute for the experience and knowledge of a human, particularly when it comes to subtle interpretation or judgment around complex issues. However, given the breadth and depth of AI’s capabilities, there are ways in which it can provide efficiencies for tax advisers today and in the future.

tod-Copilot: Built like ChatGPT, designed for accountants

Fresh from announcing its tax review automation tool, AI specialists Tax on Demand (tod) have released tod-Copilot, the developer’s own large language model (LLM) trained on HMRC’s current tax guidance and manuals.

LLMs are a new generation of AI tools designed to mimic human intelligence. Trained on large-scale datasets that contain potentially billions of parameters, LLMs are programmed to ingest and understand this data, then summarise or generate new content based on user input  – for example, answering users’ questions about the information.

Nick Stobbs, CEO and co-founder of Tax on Demand told AccountingWEB: “Navigating HMRC manuals and guidance is manually intensive, time-consuming and economically inefficient. They contain a huge amount of information. In fact, there are 154 manuals, with 54,904 active pages and more than 27 million words.

“Keeping on top of all this information is a huge task and the guidance is regularly updated, with over 3,623 updates this year alone, and 797 new pages added just in 2023,” continued Stobbs.

As shown below, tod-Copilot is designed to provide fast, accurate answers to technical tax questions, citing relevant HMRC guidance where appropriate.

“We know there are challenges using ChatGPT, so our tool uses the most up-to-date source information (as of 18 September 2023) whereas ChatGPT’s latest free version is trained on data from November 2021,” continued Stobbs.

“We’ve reduced the risk of incorrect, irrelevant or 'hallucinated' answers by optimising our tool to respond using information from HMRC manuals. The responses also reference HMRC source documents so you can verify the information independently within a wider context.“

A gamechanger for accountants and tax professionals

Tax expert Paul Aplin, who has been consulting with the tod team to help develop the Copilot tool, believes that generative AI could be a game-changer for tax professionals.

“Someone recently likened its impact to that of the pocket calculator. 40 years ago, being able to add up a column of figures by hand was a core skill for an accountant, but the calculator made that skill redundant,” said Aplin. “Generative AI will fundamentally change the way we research questions and force us to acquire new skills to ensure that we can judge the accuracy and value of the answers it gives us.”

Stobbs added, “The release of tod-Copilot is the latest step in our mission to build tools powered by AI and automation technologies that empower accountants and enable them to better serve their clients”

“We know that there are limitations with the beta version, and we plan to make regular model updates to improve in many areas,” he added. “But we also hope that by providing an accessible interface to tod-Copilot, we will get valuable user feedback on issues that we are not already aware of. 

“We are excited to carry the lessons of this release into the deployment of more capable systems, and in time to our core decision automation platform that automates the client review process to instantly identify the tax advice clients need.”

Tax on Demand’s tod-Copilot is currently in its testing phase, and the developer is releasing it to get users’ feedback and learn about its strengths and weaknesses. During this research period, usage of tod-Copilot is free. Try it now by visiting the Copilot page at the Tax on Demand site.

Replies (4)

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By Justin Bryant
27th Sep 2023 09:33

"The latest tool from AI specialists Tax on Demand (tod) aims to take away some of the risks for advisers by using proprietary AI technology trained on HMRC tax guidance and manuals."

That's got to be the funniest contradiction in terms I've seen in a long time and wouldn't be out of place as a good April Fools' joke. If anything, the risk would likely increase as even HMRC regularly reject the validity/accuracy of their own guidance/manuals. Here's a random example of a big error that would cause a firm to get sued if they followed HMRC's manual:

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Replying to Justin Bryant:
Nick Stobbs
By NickStobbsToD
27th Sep 2023 10:19

Hi Justin, agreed - we all know that HMRC's internal manuals are only their interpretation of the law, rather than the law itself (as per your link). The plan is to introduce the legislation, tax cases and interpretation into the model in time. This release is our 'starter for 10' and we have made it freely available to get users’ feedback and learn about its strengths and weaknesses (we're working on pre-training the model on tax legislation and tax cases).

Thanks (1)
Replying to NickStobbsToD:
By indomitable
27th Sep 2023 11:58

So I don't understand why you have released it, if it is not accurate what possible use can it be to a 'tax advisor'. Get it to work properly first, then release it.

Us tax advisors use various sources of information to get a view. HMRC is just one of them.

I am all for this sort of AI tech but it HAS to work. Just try ChatGPT 4 which incidentally I use. It actually makes things up if it cannot find anything factual.

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Replying to indomitable:
Nick Stobbs
By NickStobbsToD
27th Sep 2023 13:55

Hi indomitable, the preview release is accurate; it's optimised to respond using HMRC manuals (reduced risk of hallucinating) and provides verified answers by referencing the HMRC internal manual(s) it has used to generate the answer. It also uses up to date information (as at 18 September 2023) and updates itself as new manuals are released or existing pages are updated.

We haven't embedded tax legislation or tribunal judgements yet - so it won't take those into account when providing an answer. That's to come..we know HMRC's manuals are not comprehensive and they do not provide a definitive answer in every case.

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