Register to get free articles
Want unlimited access? View Plans
Already have an account? Sign in
As Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) comes into effect, the accounting profession is entering a pivotal period of transformation.
This shift is substantial. Accountants must navigate new regulatory requirements while simultaneously adopting rapidly evolving technologies. At the same time, artificial intelligence (AI) is becoming embedded in everyday workflows, fundamentally reshaping the role of the accountant — from periodic compliance towards continuous, insight-led financial stewardship.
AI is now core to how firms operate
From automated data capture to anomaly detection, AI is reducing the manual burden that has historically defined much of the profession – research by Dext conducted in 2023, before the wider adoption of AI in the workplace, found that 60% of accountants felt they spent too much time on manual tasks. Today, adoption of AI tools is accelerating rapidly, with 52% of accountants using an open-source generative AI tool, such as ChatGPT, for individual work-related use cases to ease the load of time-sensitive tasks.
By freeing up time, AI allows accountants to focus on higher-value activity – interpreting data, advising clients and supporting better decision-making. Ultimately, AI is changing what work matters, rather than just how it gets done.
However, as AI becomes more accessible, a parallel risk is emerging. Businesses are increasingly turning to general-purpose AI tools for financial and tax-related guidance, often without understanding the limitations of those platforms. According to research by Dext (2026), 77% of British accountants and bookkeepers have seen an increase in clients using public AI tools, such as ChatGPT, to seek financial, tax or bookkeeping guidance.
This creates a clear governance challenge. AI is not inherently authoritative – particularly in regulated areas such as tax – and misinterpretation can lead to real financial consequences. According to the research by Dext, half of UK accountants and bookkeepers say they are aware of businesses that have suffered direct financial losses due to incorrect or misleading advice generated by AI tools, with the most common mistakes being incorrect business tax planning advice, incorrectly claiming or charging VAT/GST and incorrect interpretation of business expenses.
For the profession, this reinforces the importance of responsible adoption. Firms that implement clear frameworks around AI usage – combining automation with professional oversight – will be best placed to protect clients and maintain trust.
MTD is redefining the accounting cycle
The integration of MTD will also have a significant impact on the industry – financial data will be more current, errors will be identified earlier, and tax liabilities will become more predictable.
This creates the conditions for a different kind of client relationship. Accountants can provide ongoing, proactive guidance, helping clients to stay on track throughout the year, and move closer to a model of ‘always on accounting’.
This is particularly valuable in sectors such as PR and marketing, where spending decisions and cash flow tends to change rapidly due to project-based revenue, slow-paying clients, and high upfront costs for campaigns.
Access to up-to-date financial insight should allow for quicker, more informed decision making; and positions accountants as a key part of that process.
As the function evolves, so too does the skillset required to deliver it. Technical expertise remains fundamental, but it is no longer sufficient on its own. Accountants must now be comfortable working with AI-enabled tools, interpreting data at a deeper level, and applying judgement in an environment where technology plays an increasingly active role.
Upskilling is key, and accountants should get ahead by developing a mix of technical proficiency in AI tools, data analytics and enhanced advisory skills to position themselves as strategic partners, rather than just reporters of financial data.
Balancing opportunity with responsibility
The opportunities created by AI and MTD are significant. Firms that embrace continuous accounting and predictive insight can deepen client relationships and unlock new avenues for growth.
However, this must be balanced with responsibility. AI should enhance professional judgement, not replace it. Oversight and accountability remain critical – particularly as regulatory scrutiny continues to evolve.
The combination of embedded AI and mandated digital reporting is accelerating a shift that has been building for years. Firms that respond decisively – by investing in technology, strengthening governance and evolving their skillsets – will be well positioned to lead in this new environment. Those that do not risk falling behind as client expectations continue to change.
