Who pays the penalty if AI software gets my tax return wrong?

You do. HMRC charges penalties to the taxpayer, not the software. If you took reasonable care there is no penalty; a careless error costs 0% to 30% of the extra tax, so check every figure before your 2026-27 return goes.

The rules below follow HMRC's penalty factsheet CC/FS7a and GOV.UK, as checked on 16 October 2026.

Why it lands on you

HMRC's factsheet says that if you ask someone else to do something for you, such as an adviser, you must still do everything you reasonably can to prevent inaccuracies. Software, AI or not, sits in the same place. HMRC's own guidelines for developers of AI tax software, published 28 January 2026, say AI should support, not replace, human judgement, and that HMRC does not approve any product.

So the question HMRC asks is not "who made the mistake?" but "did you take reasonable care?"

How big the penalty can be

The penalty is a share of the extra tax the mistake caused.

Unprompted means telling HMRC before you have any reason to think it has found, or is about to find, the error. HMRC can suspend a careless penalty for up to 2 years with conditions to help you avoid future mistakes; meet them and you don't pay it.

Example: software puts a £2,000 personal purchase through as a business cost and, at 20% tax, that understates your tax by £400. If HMRC finds it and judges it careless, the penalty is £60 to £120 on top of the £400. Spot it and tell HMRC first, and the range starts at £0. This is an example only. Your own figures will differ.

What reasonable care looks like

HMRC's examples are keeping enough records to send an accurate return, keeping them safe, and asking HMRC or a professional for help when you're unsure, then following what they say. With software doing the sorting, that means:

• reading the figures before anything is sent, not approving them blind
• questioning anything that looks odd, such as a personal cost marked as business
• keeping the receipts and bank statements behind the figures

Steps if you find a mistake

1. Stop and work out what went wrong and which tax year it affects.
2. If it is within 12 months of the Self Assessment deadline, correct the return. Online, you can do it 72 hours after filing, from your Self Assessment account. If you used commercial software, GOV.UK says to ask the provider for help, and to contact HMRC if the software can't make the change.
3. If the 12 months have passed, write to HMRC to report the income you left out. If you paid too much, you can claim overpayment relief up to 4 years after the end of the tax year.
4. Pay any extra tax as soon as you can.
5. Keep a note of what happened and when you told HMRC, because telling HMRC first lowers the penalty range.

What the provider owes you

That depends on its terms, not on HMRC, and terms differ from one provider to the next. Read what they say about mistakes, refunds and penalties before you choose, and ask who is accountable if something goes wrong.

What this means for you

AI software can save hours, but the return is still yours. The best protection is a process where you see and confirm every figure before it reaches HMRC, records you can produce if asked, and a named person you can hold to account. If a mistake does slip through, telling HMRC first is what keeps the cost down.

Use the free MTD check to see when Making Tax Digital starts for you, and read whether an AI can do your tax return for how to check a provider. There are more guides in the trades and landlords sections.