As the new tax year begins, many small businesses are looking for ways to save time and cut costs. Increasingly, that means turning to public AI tools like ChatGPT or Claude – whether it’s for quick answers, creative ideas or admin support.

But relying on public AI tools for financial guidance can be an expensive mistake.

These tools can give you fast, confident answers. But they don’t know your business, and they don’t take responsibility when those answers are wrong.

New research from Dext shows that this isn’t a future risk. It’s already costing British businesses money.

Why more businesses are turning to public AI. And where it goes wrong.

In the past year alone, 77% of British accountants and bookkeepers have seen an increase in clients using tools such as ChatGPT, and other large language models, to seek financial, tax or bookkeeping guidance.

It’s easy to see why. You can ask a question anytime, get an instant response, and it often sounds clear and convincing.

But tax and bookkeeping aren’t about sounding right. They’re about being right based on the exact details of your business.

And that’s where public AI falls short.

It can’t see your transactions, your receipts, your payroll, or your previous tax filings. It doesn’t know how your accounts are structured or what software you use.

So, when you ask it a question, it fills in the gaps. And that’s where mistakes happen.

The real cost: lost money, penalties and mistakes

Half of UK accountants and bookkeepers surveyed say they are aware of businesses that have suffered direct financial losses, as a result of incorrect or misleading advice generated by public AI tools. These losses include overpayments, missed allowances, compliance issues, penalties and fines.

The most common mistakes these professionals report are practical everyday issues that can quickly snowball into a costly mess – including incorrect interpretation of business expenses (46%), incorrectly claiming or charging VAT (41%), and errors linked to personal tax planning (35%), payroll (34%) and business tax planning (34%).

These aren’t minor misunderstandings. They can impact cash flow, create late or inaccurate filings, and trigger avoidable HMRC scrutiny.

A growing clean-up problem for accountants, and businesses

These errors are becoming increasingly frequent. Nearly a third (31%) of accountants and bookkeepers say they now encounter mistakes in SMB finances caused by incorrect or misleading AI financial or tax advice every week, with 7% seeing them daily.

And, crucially, these mistakes aren’t just random cases. They are issues that show up in everyday bookkeeping. The most common errors accountants report include incorrect interpretation of business expenses (46%), incorrectly claiming or charging VAT (41%), and errors linked to personal tax planning (35%), payroll (34%) and business tax planning (34%).

Even when problems are caught in time, the clean-up comes with a hidden cost. Among those encountering public AI-related errors, 93% estimate they spend up to ten hours each month correcting them, with two fifths spending between four and ten hours.

That time ultimately lands back on businesses; through higher professional fees, delayed accounts, missed deadlines, and management time spent untangling issues that should never have made it into the books in the first place.

AI isn’t the problem. Using the wrong AI is.

This isn’t about avoiding AI altogether.

AI can help your business, especially when it comes to reducing admin and keeping records organised.

But, when it comes to your finances, you need tools that are built for the job.

That means AI that works with your actual financial data, understands accounting rules, and is designed for compliance. Not a general chatbot trying to answer complex tax questions without the full picture.

That’s why more businesses are turning to tools like Dext, using AI designed specifically for bookkeeping automation to keep records accurate, organised and up to date.

Get it right the first time

When it comes to your finances, small mistakes don’t stay small. They can mean overpaying tax, missing deadlines, or facing penalties you didn’t expect.

And by the time you realise something’s wrong, you’re already paying to fix it.

AI can save you time in your business. But if you’re using the wrong tools for your finances, it could be costing you far more than you think.