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UK law, tax and HMRC

How UK law, copyright, HMRC and the EU AI Act apply when a small business uses AI.

• Can AI images be illegal in the UK?
  Yes. Across the UK it's a crime to make or share AI-generated child sexual abuse images, and in England and Wales it's a crime to create a sexually explicit deepfake of an adult without consent. Making or supplying tools built for intimate deepfakes became an offence in June 2026. Ordinary AI images can still break copyright or consumer law.
• Can ChatGPT do my tax return?
  No. ChatGPT can't file a Self Assessment return with HMRC, and you shouldn't rely on it for your figures. It can explain terms, help you sort expenses into categories and draft questions for your accountant. The return itself goes through HMRC's online service or HMRC-recognised software, and you're responsible for every number on it.
• Can ChatGPT write a contract?
  It can draft one, but check it. ChatGPT writes clear terms quickly but may follow US law or miss UK consumer rules. For example, GOV.UK says that when you agree work in a customer's home you must tell them they can cancel within 14 days. Use AI for a first draft, then check it against UK guidance or a solicitor.
• Do I have to tell customers I use AI?
  Not always. UK law doesn't require you to label every AI-drafted email. You do need to be open when AI processes customers' personal data (your privacy notice), when it makes significant decisions about people, and whenever leaving it out would mislead, such as AI-generated photos presented as your own work or an AI receptionist pretending to be a person.
• Does HMRC use AI?
  Yes. HMRC's July 2026 transformation update says it has issued more than 28,000 Microsoft Copilot licences to staff, runs an AI-powered digital assistant called Ask HMRC with over 6.3 million interactions in 2025 to 2026, and is piloting AI call summaries. It also uses data and AI to nudge people towards correct returns and to target compliance work.
• How can solicitors use AI in the UK?
  UK solicitors can use AI to draft letters and documents, summarise bundles, assist research and handle firm admin, but they stay fully accountable for the output. The SRA's warning notice of 17 August 2026 highlights two risks: AI-invented case citations reaching courts, and confidential client information being put into public AI tools.
• Is AI regulated in the UK?
  The UK has no single AI law. As of October 2026 there's no AI bill before Parliament, and the government regulates AI through existing laws and regulators: UK GDPR and the ICO for personal data, consumer law for misleading claims, equality law for discrimination, and copyright law. The EU AI Act can apply if you sell into the EU.
• Is AI voice cloning legal in the UK?
  Cloning your own voice, or someone's voice with their clear permission, is generally lawful. Cloning someone else's voice without consent can break UK data protection law and, depending on use, copyright, performers' rights, passing off or fraud law. The UK has no specific law on voice or likeness yet; the government has said it will consult on digital replicas.
• What is the EU AI Act, and does it apply in the UK?
  The EU AI Act is the European Union's law on artificial intelligence. It bans some uses, sets rules for high-risk systems and requires transparency, such as telling people they're talking to AI. It doesn't apply in the UK itself, but it can apply to UK businesses that provide or use AI systems affecting people in the EU.
• Who owns AI-generated content in the UK?
  In the UK, work you create with AI help, making real creative choices, is protected by copyright like any other work. Purely computer-generated work with no human author currently has a special, shorter protection under section 9(3) of the Copyright, Designs and Patents Act 1988. In March 2026 the government proposed removing that protection, but no law has changed yet.

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