Aipedia: Tax advisers

AI-drafted tribunal submissions and Elden v HMRC

Aipedia, by the Apex broking team · Last reviewed 2026-10-27

Tax advisers can use AI to help draft tribunal submissions, but after Elden v HMRC unchecked AI case summaries can be labelled professional incompetence. The firm, not the tool, carries the consequences.

Part of: AI in Tax advisers

In short

In Elden v HMRC [2026] UKFTT 41 (TC) a skeleton argument prepared by an ICAEW-regulated accountancy firm used AI, and the summaries of three authorities were wrong. The Tribunal said the lack of care "amounts to professional incompetence on the part of any regulated individual or firm involved" (para 139), required future skeletons to carry statements of truth (para 158), and said it would consider referring people to professional bodies (para 159). The Upper Tribunal in Gunnarsson confirmed that representatives are responsible for what they put forward and that costs sanctions are available. PI may cover a client's claim, but not fines or disciplinary outcomes.

How advisers use AI in tribunal work

Tax advisers who represent clients before the First-tier Tribunal use AI to summarise decisions, draft grounds of appeal, structure skeleton arguments and tighten wording. In Elden the representative said AI was used "to aid conciseness and consistency". The risk is that a summary reads well but misstates what a case decided.

What Elden decided

Elden v HMRC [2026] UKFTT 41 (TC) concerned income tax on dividends and CGT on a property disposal. The skeleton argument for a hearing on a strike-out application described three authorities as supporting points they did not support. The Tribunal found:

the case summaries "were produced using AI and they have not been verified for accuracy with sufficient care", which "amounts to professional incompetence on the part of any regulated individual or firm involved" (para 139);
future skeletons must be accompanied by statements of truth, from the appellant or from anyone who contributed, confirming each statement and case summary has been checked, with other contributors stating their professional qualifications and regulator (para 158);
the Tribunal will consider referring anyone whose submissions fall below expected professional standards to their professional body (para 159).

The decision does not itself order wasted costs. In HMRC v Gunnarsson [2025] UKUT 247 (TCC) the Upper Tribunal applied the Ayinde guidance: representatives are responsible for what they put forward, and costs, wasted costs and strike-out are available in appropriate cases.

The duties that apply

PCRT AI para 3.4: confirm that cited case law and legislation exist and say what you claim.
Para 3.5: members remain ultimately accountable.
Para 1.6: responsibility for staff who draft under supervision.
Professional behaviour (5.x): avoid negligent work.
Any statement of truth the Tribunal requires.

See the PCRT AI guidance explained.

What can go wrong

Illustrative scenario: a junior adviser uses AI to summarise five authorities for a penalty appeal skeleton. The partner reviews the argument but not the summaries. At the hearing HMRC points out that two cases decided the opposite. The Tribunal adjourns, criticises the firm in its decision, and the client loses the appeal. The client then complains to the professional body and claims the penalty and the extra fees from the firm.

The firm now faces three separate problems: the client's civil claim, a possible costs order, and a conduct referral.

The statements of truth required in Elden change the position further. A named person confirms that every statement of fact and case summary has been personally checked. If that confirmation is given carelessly, the individual, not just the firm, is exposed to criticism.

How PI usually responds

The client's claim for losses caused by negligent representation is a civil liability claim, which the CIOT/ATT PII Regulations require cover for. It would usually be handled like any other negligence claim, subject to the terms. A wasted costs order against the firm is less clear: some wordings treat it as compensation for a third party, others may not, so check yours. Fines and disciplinary sanctions are commonly excluded, though some policies include limited cover for defence costs in regulatory proceedings. Notify insurers promptly once the Tribunal criticises your work; see circumstance notification and the fines and penalties exclusion.

Practical controls

Open and read every authority cited, in full.
Check that each summary matches the decision's actual reasoning.
Name who checked each citation; the statement of truth requires it.
Keep the AI prompts, outputs and your checking notes on file.
Allow time: in Elden the representative attributed the errors to final-stage editing under time pressure (para 120), an explanation the Tribunal found lacked full coherence.

How Apex helps

Apex arranges PI for tax advisers who take on tribunal work. A broker can check how your policy treats costs orders and regulatory defence costs.

Sources

Frequently asked

Does Elden stop advisers using AI for skeleton arguments?

No. The Tribunal criticised the lack of verification, not AI use as such. Future skeletons in that appeal needed statements of truth confirming every case summary had been checked. Advisers should expect similar scrutiny in other appeals.

Can the Tribunal report me to my professional body?

In Elden the Tribunal said it would consider references to any professional body where submissions fall below the professional and ethical standards it expects (para 159). For CIOT and ATT members, discipline runs through the Taxation Disciplinary Board.

Will PI pay a wasted costs order?

It depends on the wording. A client's negligence claim usually falls within cover. Costs orders against the firm, fines and disciplinary sanctions are treated differently by different policies, and fines are commonly excluded. Ask your broker to check.

Check your PI covers how you use AI

Tell us about your firm and the work you do. A broker will review how your current PI treats AI-assisted work, or arrange new cover. No fee for a quote. Or call 0117 325 0027.

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Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information about how AI is used in the profession and how insurance may respond. It is not legal, regulatory or insurance advice on your circumstances, and it does not guarantee that cover will be available or on what terms.