IRIS Software Deploys AI to Combat Tax Filing Errors

IRIS software has rolled out artificial intelligence capabilities designed to catch tax return errors before they reach UK tax authorities, positioning the global accounting software provider at the forefront of an industry-wide shift toward automated compliance. The London-based company launched the first phase of its tax anomaly detection tool in mid-November, integrating the technology directly into its flagship IRIS Elements and IRIS Accountancy Suite platforms at no additional cost to users.

The timing couldn’t be more strategic. IRIS software customers file more than two million personal tax returns annually, and the rollout arrives just ahead of the profession’s peak filing season, when millions of returns must be submitted before HMRC deadlines. The tool applies machine learning to compare current-year returns against historical data, automatically flagging discrepancies such as unexpected income fluctuations, missing dividend or interest income, and manual entry errors.

Built on GPT-4.1 and fully integrated into Microsoft Foundry, the system represents what IRIS software describes as a strategic shift from compliance software provider to AI-powered tax preparation partner. The deployment forms the initial phase of a multi-million-pound investment that CEO Jason Dies framed as fundamental rather than superficial. The company aims to embed AI capabilities across its entire software portfolio, spanning payroll, HR, and education solutions serving more than 100,000 organizations globally.

Over 13,000 UK accounting practices using IRIS software platforms now have access to the anomaly detection features. The company projects that mid-sized firms employing nine to 75 people could save up to £44,930 annually once all three planned phases are implemented over the next 12 months. Smaller practices using the cloud-native IRIS Elements platform are expected to save a minimum of 250 hours per year, while mid-sized firms could reclaim an average of 1,250 hours.

When fully deployed, IRIS software estimates the tool will release approximately six million hours back into the profession across its customer base. The company claims the complete platform will reduce tax return preparation time from four hours to as little as 90 minutes, cutting the process by up to 62.5% while reducing errors by 95%.

Jonathan Priestley, General Manager of Global Accountancy Solutions and Transformation at the company, characterized the tool as among the first solutions purpose-built for UK tax compliance that comprehends HMRC regulations and accounting workflows. The second phase, scheduled within the next year, will introduce validation checks against HMRC regulations and automated extraction of information from documents including P60s and payslips. The third phase will extend capabilities to post-submission monitoring and automatically generated client reports.

The launch arrives amid surging demand for AI tools across the accounting profession. Recent research shows 91% of accountants currently use AI for researching tax matters and drafting documents, with two-thirds planning adoption within three years. Younger accountants are driving the shift, with those aged 18 to 24 showing a 29% higher adoption rate than their older colleagues.

Microsoft UK & Ireland Software Company Partnerships director Chris Tuite noted the collaboration leverages Microsoft’s secure AI infrastructure to help UK accounting practices operate more efficiently during their most demanding season. The partnership with Microsoft represents IRIS software’s latest move to position itself as an AI-first organization, following last year’s acquisition of Dext, a bookkeeping software company that uses AI to automate routine administrative tasks.

The broader competitive landscape is heating up. The company made a strategic minority investment in May 2025 in Instead, an AI-powered tax platform that became the first new platform in decades to earn IRS approval to file individual and business tax forms. That platform, which aims to automate over 90% of the tax preparation process, operates as a separate entity but signals the company’s commitment to AI-driven tax innovation across multiple markets.

For UK practices, the immediate impact centers on error prevention and time savings. Discrepancies flagged by IRIS software’s anomaly detection system address issues that risk costly fines and reputational damage across the sector. The tool identifies problems early in the workflow, enabling accounting professionals to resolve issues before submission rather than dealing with HMRC queries or penalties after filing.

The deployment also reflects a practical response to resource constraints. With AI handling routine error detection and validation, practitioners can redirect hours toward advisory services, client relationships, and business development. For smaller firms in particular, the technology offers enterprise-grade AI capabilities previously accessible only to larger practices, eliminating the need for multiple software solutions and enabling growth without proportional increases in headcount.

Dies, who joined the company in July after serving as interim CEO of Pitney Bowes, emphasized that the AI integration represents a fundamental reimagining of customer workflows rather than superficial feature additions. The executive, who brings more than 30 years of global leadership experience from IBM and Pitney Bowes, is steering the company through what may prove its most significant technology transformation since its founding in 1978.

The tax anomaly detection rollout carries implications beyond individual practices. If IRIS software successfully delivers on its projected six million hours of annual time savings, the broader impact could reshape how UK accounting firms allocate resources during tax season, potentially freeing up capacity for higher-value advisory work that has become increasingly important as automation handles more routine compliance tasks.

The success of the initial phase will likely influence the pace and scope of subsequent rollouts across the company’s international operations. With IRIS software serving customers across 135 countries, the UK deployment serves as a proving ground for AI-powered compliance tools that could eventually extend to other tax jurisdictions and regulatory frameworks. The company’s decision to integrate the technology at no additional cost to existing users also sets a competitive precedent in a market where AI capabilities are often positioned as premium upgrades.

As tax authorities worldwide increase their own use of AI for audit selection and enforcement, software providers face pressure to help practitioners stay ahead of automated scrutiny. The deployment of IRIS software’s anomaly detection tool represents one answer to that challenge, positioning error prevention and compliance validation as standard features rather than optional enhancements.