IRIS rolls out AI tool to speed UK personal tax returns

IRIS Software Group has begun rolling out an artificial intelligence-based tax anomaly detection tool for UK accountants, as part of a wider multi-million-pound investment in AI across its software portfolio.

The tax tool sits inside IRIS Elements and IRIS Accountancy Suite and uses AI models developed with Microsoft. IRIS said it expects the software to cut the time needed to prepare a personal tax return from around four hours to as little as 90 minutes once all phases are in place.

The company said its 13,000 UK accountancy practice customers file more than two million personal tax returns each year. It estimates that full deployment of the system could release up to six million hours annually across its customer base.

AI-driven checks

The first phase of the tool focuses on anomaly detection ahead of submission to HM Revenue & Customs. It compares current-year returns against historical data and flags potential inconsistencies, including unexpected income changes, missing dividend or interest income, and manual entry mistakes.

The software is integrated into IRIS Elements and IRIS Accountancy Suite at no extra charge for customers. It uses GPT-4.1 in the agent layer and runs on Microsoft's Foundry infrastructure.

IRIS positions the launch as the start of a shift from a compliance software focus towards a more AI-driven tax preparation role. It forms part of the group's stated ambition to build what it describes as one of the UK's most intelligent personal tax automation platforms.

IRIS plans to add two further phases over the next year. It expects the full platform to cut tax return preparation time by up to 62.5% and reduce errors by as much as 95% once all elements are live.

"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, Global Accountancy Solutions and Transformation at IRIS Software Group. "Firms that thrive are those who embrace technology as a trusted partner and with this tool we're giving practices of all sizes the power to unlock their growth potential with AI they can trust."

Time and cost savings

IRIS said mid-sized firms with between nine and 75 employees that use IRIS Accountancy Suite could see significant time and financial savings once all three phases are implemented. The company projects annual savings of up to £44,930 for an average practice filing 500 returns.

It said these firms may save around 1,250 hours a year on tax workflows. Smaller practices using the cloud-based IRIS Elements product are expected to save at least 250 hours annually.

The company said Elements users will gain the same AI functionality within a single platform. It said this reduces reliance on multiple point solutions and allows practices to increase workload without a matching rise in staff numbers.

Across the installed base, IRIS forecasts that once the system is fully rolled out, accountants will be able to divert many hours from manual review and data checking into advisory services, client work and business development.

Phased rollout

The first phase has already been incorporated into IRIS Elements and IRIS Accountancy Suite since mid-November. It focuses on early detection of anomalies that can lead to filing errors, penalties and reputational risk.

Over the next 12 months, a second phase is set to add automated validation against HMRC rules and data extraction from P60s, payslips and other source documents. A third phase will cover post-submission monitoring and generate client reports using AI.

The introduction comes as firms enter the traditional "busy season" for tax work, when many personal returns are due ahead of statutory deadlines.

Rising AI adoption

IRIS said the launch responds to growing use of AI tools by accountants. It cited research showing that 91% of accountants already use AI for tasks such as researching tax issues and drafting documents, and that around two-thirds plan wider adoption within three years.

The research indicates higher adoption among younger professionals. Accountants aged 18 to 24 showed a 29% higher AI usage rate, which IRIS said points to a generational shift in practice management.

Broader AI strategy

The move follows IRIS's acquisition of Dext, a provider of accounting and bookkeeping software that uses AI to automate routine processes. That deal formed a key part of IRIS's earlier expansion in intelligent automation.

IRIS now plans a broader AI-first strategy backed by a multi-million-pound investment. The company aims to embed AI tools across accounting, payroll, HR and education software used by more than 100,000 organisations worldwide.

"This isn't about adding AI features for the sake of it - we're fundamentally reimagining how our customers work with an AI-first, AI-everywhere approach," Said Jason Dies, CEO at IRIS Software Group, "We're starting with one of our core segments, the accounting profession, but these AI capabilities will extend across our entire software portfolio, payroll, HR and education, transforming the critical work each of our customers do every day."

The collaboration with Microsoft uses the technology group's AI infrastructure and large language models, which are designed for secure use at scale.

"By building on Microsoft's secure AI infrastructure, IRIS is helping UK accounting practices work more efficiently and accurately during their most demanding season by making AI insights available in the flow of work. This practical AI innovation has the potential to turn into measurable business value for its customers," said Chris Tuite, Director, Software Company Partnerships UK & Ireland, Microsoft.