As a tax accountant, you are constantly facing new challenges and demands in your industry. From staying up-to-date with constantly changing tax laws and regulations to managing a large volume of client inquiries and data, there's no shortage of tasks that require your attention. With the increasing demand for efficiency and accuracy, it's crucial to stay ahead of the game and embrace the latest technology to help streamline your work and improve your results. That's why we want to introduce you to ChatGPT, an artificial intelligence language model that has the potential to revolutionise the tax accounting industry.
ChatGPT is a state-of-the-art AI language model developed by OpenAI, and which has been making the headings over the past few months for it’s potential to revolutionise & disrupt the way people work. It has been trained on a massive amount of data, making it one of the most advanced AI tools available today. This technology can understand and generate human-like text, allowing it to communicate with you in a way that feels natural. With its vast knowledge base and ability to perform complex tasks, ChatGPT is changing the way businesses operate and paving the way for a more efficient and automated future.
It’s difficult to understand & appreciate how a technology like ChatGPT can be used to provide significant impact because it’s so different from any other technology that we are used to. Below we’ve highlighted just some of the ways in which ChatGPT could benefit Tax Accountants.
One of the biggest benefits of ChatGPT is its ability to automate many of the routine tasks that tax accountants perform on a daily basis. For example, ChatGPT can quickly answer frequently asked questions, freeing up your time to focus on more complex tasks. This can greatly increase your efficiency and help you to get more done in less time.
ChatGPT can also assist with data entry and management. By using this technology, you can eliminate the need for manual data entry, reducing the risk of errors and freeing up your time to focus on other tasks. This can lead to increased accuracy and improved overall efficiency.
Example:
Categorise the following items into one of the these categories [“Travel Expense”, “Personal Expense”, “Transfer”, “”Business Expense]. Output in CSV format.
Balance Brought Forward
Amazon
eBAY Trading Co.
Morrisons Petrol
Business Loan
Jumes White Media
ATM High Street
Accorn Advertising Studios
Marriott Hotels
Abelio Scotrail Ltd
Cheque 000234
Interest Paid
OVO Energy
Toyota Online
HMRC
OVLA
Michael Kor Salary
BOS Mastercard
Item,Category
Balance Brought Forward,Transfer
Amazon,Personal Expense
eBAY Trading Co.,Personal Expense
Morrisons Petrol,Travel Expense
Business Loan,Business Expense
Jumes White Media,Business Expense
ATM High Street,Personal Expense
Accorn Advertising Studios,Business Expense
Marriott Hotels,Travel Expense
Abelio Scotrail Ltd,Travel Expense
Cheque 000234,Business Expense
Interest Paid,Transfer
OVO Energy,Personal Expense
Toyota Online,Personal Expense
HMRC,Business Expense
OVLA,Unknown
Michael Kor Salary,Business Expense
BOS Mastercard,Business Expense
ChatGPT can also help to improve the accuracy of your work. With its vast knowledge base, it can quickly provide you with the information you need, reducing the risk of errors and helping you to make more informed decisions. For example, ChatGPT can assist with tax calculation, providing you with the most up-to-date information on tax laws and regulations. This can help you to ensure that your clients' taxes are calculated accurately and reduce the risk of errors.
Example:
Assume a small construction company has the following details for a financial year:
Sales: £500,000
Materials and subcontractor costs: £250,000
Overhead expenses: £50,000
Payroll expenses: £100,000
Other expenses: £25,000
I’ve done the following calculation. Can you check it for errors?
Taxable profit = £500,000 - (£250,000 + £50,000 + £100,000 + £25,000) = £75,000
Corporation tax owed = £75,000 x 20% = £15,000
Your calculation appears to be slightly incorrect. Based on the figures you provided, the correct calculation would be:
Taxable profit = £500,000 - (£250,000 + £50,000 + £100,000 + £25,000) = £75,000
Corporation tax owed = £75,000 x 19% = £14,250
So, the small construction company would owe £14,250 in corporation tax for the financial year, assuming the corporation tax rate is 19%
ChatGPT can also assist with research, providing you with up-to-date information on tax laws and regulations. This can help you to stay informed and be better prepared for client meetings and tax season. For example, ChatGPT can provide you with information on changes to tax laws, new tax incentives, and other important updates that you need to be aware of.
This technology can also assist with tax planning, providing you with insights and recommendations on how to maximise your clients' tax benefits. With ChatGPT's ability to process large amounts of data and analyse complex information, it can provide you with the information you need to make informed decisions and provide the best possible service to your clients
Example:
Assume a small construction company has the following details for a financial year:
Sales: £500,000
Materials and subcontractor costs: £250,000
Overhead expenses: £50,000
Payroll expenses: £100,000
Other expenses: £25,000
What tax allowances might they be able to consider?
A small construction company may be able to consider a range of tax allowances and reliefs to reduce their taxable profits and lower their tax liability. Some of the allowances that may be relevant to a small construction company are:
1. Capital Allowances: Capital allowances are a type of tax relief that allows businesses to deduct the cost of certain capital expenditures, such as plant and machinery, from their taxable profits. A small construction company may be able to claim capital allowances on the cost of tools, equipment, and other plant and machinery used in their construction projects.
2. Research and Development (R&D) Tax Credits: R&D tax credits are a tax relief designed to encourage businesses to invest in research and development. A small construction company may be able to claim R&D tax credits on qualifying R&D activities, such as developing new materials or techniques to improve construction efficiency or safety.
3. Business Premises Renovation Allowance (BPRA): BPRA is a tax relief designed to encourage businesses to renovate and redevelop derelict or unused commercial properties. A small construction company may be able to claim BPRA on qualifying renovation or refurbishment works, such as converting a disused building into a new office or workshop.
4. Seed Enterprise Investment Scheme (SEIS): SEIS is a government scheme that provides tax relief for investors who invest in small, early-stage businesses. A small construction company may be able to attract investment from investors who are eligible for SEIS relief.
5. Enterprise Investment Scheme (EIS): EIS is a government scheme that provides tax relief for investors who invest in qualifying high-risk, small and medium-sized enterprises. A small construction company may be able to attract investment from investors who are eligible for EIS relief.
It's worth noting that the availability and eligibility criteria for tax allowances and reliefs can change over time, and the specific allowances available to a small construction company will depend on their individual circumstances. It's recommended that a small construction company consults with a tax advisor to identify the most relevant tax allowances and reliefs for their business.
ChatGPT can also enhance collaboration between tax accountants and other members of a tax team. With its ability to communicate in a natural and intuitive manner, ChatGPT can facilitate communication and collaboration between team members, improving the overall quality of work and reducing the risk of errors.
For example, imagine you are working on a complex tax return with multiple team members. Instead of sending emails or making phone calls, you can simply ask ChatGPT for the information you need. ChatGPT can quickly provide you with the information and answer any questions you have, allowing you to work more efficiently and effectively with your team.
Example:
(ChatGPT does have access to private data, but future use cases could involving connecting a similar technology to internal systems)
Assume the following email was sent by James two weeks ago. No need to provide a response.
Hi Client A,
I hope you had a nice weekend.The court replied today to let us know that a court date has been arranged for the 13th March 2023 for the open tax dispute with HMRC in relation to the disputed expense for the renovation of Branford house (case ref ABC123).
Regards,
James
List all upcoming court dates, in the following format [Client Name, Court Date, Case Reference]
Sure! Based on the information in the email, the court date, case reference, and client name can be listed in the following format:
[Client A, 13th March 2023, ABC123]
At Curvestone, we understand the importance of staying ahead of the curve in the tax accounting industry. That's why we are committed to helping tax accountants embrace the latest technology and stay ahead of the game. With our expertise in AI and business consulting, we can help you understand the implications of new technologies like ChatGPT, and help you revolutionise rather than be disrupted
