IRIS Software adds AI tax anomaly detection for UK accountants

By Vriti Gothi

IRIS Software Group has launched the first phase of an AI-powered tax anomaly detection tool designed to reduce preparation time and errors in UK personal tax filings, as accounting firms face mounting workload pressure and tighter compliance expectations.

The new capability has been integrated into IRIS Elements and IRIS Accountancy Suite at no additional cost for customers. Built using GPT-4.1 and deployed through Microsoft Foundry, the tool identifies discrepancies in tax returns by comparing current filings against historical data and flagging issues such as unexpected income fluctuations, missing dividend or interest income, and manual data entry errors before submission to HMRC.

IRIS estimates that the tool can cut the time required to prepare a personal tax return from around four hours to as little as 90 minutes. Across its base of more than 13,000 UK accounting practices, the company projects that up to six million hours could be released back into the profession once all planned phases are fully deployed.

The launch marks a strategic shift for IRIS, which is positioning itself beyond traditional compliance software toward becoming an AI-enabled tax preparation partner. It also represents the first phase of a multi-million-pound investment aimed at embedding AI across the company’s flagship platforms.

“This is one of the industry’s first solutions built specifically for UK tax compliance that actually understands HMRC rules and accounting workflows,” said Jonathan Priestley, General Manager for Global Accountancy Solutions and Transformation at IRIS Software Group. He added that the intent is to provide firms with AI capabilities that function as a “trusted partner” rather than a standalone feature.

Two further phases are scheduled over the next 12 months. Phase two will introduce automated validation against HMRC rules and document extraction from sources such as P60s and payslips, while phase three is expected to enable post-submission monitoring and AI-generated client reporting. When fully implemented, IRIS claims the platform could reduce preparation time by up to 62.5% and cut errors by as much as 95%.

The timing of the rollout is notable, arriving ahead of the UK tax sector’s peak filing season, when capacity constraints are most acute. Mid-sized firms using IRIS Accountancy Suite are projected to save more than 1,200 hours annually once all phases are live, while smaller firms on IRIS Elements could save at least 250 hours a year, according to company estimates.