In a recent Upper Tribunal case (HMRC v Marc Gunnarsson), a taxpayer appeared without professional representation and relied on Artificial Intelligence (AI) software to prepare his skeleton argument ahead of the hearing.

The Tribunal concluded that the taxpayer’s Self-Employment Income Support Scheme (SEISS) claims – made while he was a director of a limited company – were incorrect, and he was ordered to repay the funds he had received.

Within his skeleton argument, the taxpayer cited three First Tier Tribunal decisions in support of his position. However, these cases did not exist – they had been ‘hallucinated’ by the generative AI software.

With the use of AI on the rise, this case highlights the importance of verifying the accuracy of any information before relying upon it. There is a genuine risk that false or fabricated material could be introduced as evidence in legal proceedings.

Although AI tools can offer many benefits in the modern world, when it comes to matters of taxation it remains essential to seek advice and guidance from a trained and qualified professional.