IRIS Software Group has launched its first phase of its AI-powered tax anomaly detection tool, transitioning from a compliance software provider into AI-powered tax preparation partner.
The AI-powered tax anomaly detection feature is now accessible to UK accounting professionals using IRIS Elements and IRIS Accountancy Suite at no additional cost.
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This initial launch forms part of an investment strategy valued in the multi-million-pound range, with the aim of establishing IRIS as an “AI-first” organisation.
The tool integrates with Microsoft Foundry, is built on GPT4.1 and offers the ability to compare current year tax returns with previous submissions.
It flags potential discrepancies such as unusual changes in income, omissions in dividend or interest reporting, and possible manual data entry mistakes prior to submission to HMRC.
With this first phase now available, IRIS plans two further rollouts over the coming 12 months.
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By GlobalDataOnce all phases are deployed, it is estimated that approximately six million working hours could be saved annually across IRIS’s user base, which processes more than two million personal tax returns each year.
IRIS Software Group CEO Jason Dies said: “This isn’t about adding AI features for the sake of it – we’re fundamentally reimagining how our customers work with an AI-first, AI-everywhere approach.
“We’re starting with one of our core segments, the accounting profession, but these AI capabilities will extend across our entire software portfolio, payroll, HR and education, transforming the critical work each of our customers do every day.”
The anomaly detection system was implemented into IRIS platforms from mid-November 2025.
It applies AI techniques to identify errors early in the process and aims to support accounting professionals in resolving issues before submission.
The second phase will introduce validation checks against HMRC regulations and enable automated extraction of information from documents such as P60s, payslips, and other source materials.
The third phase will extend automation capabilities further by including post-submission monitoring functions and automatically generated client reports.
While these AI features are initially being introduced within the accounting segment, similar upgrades are planned for payroll, HR, and education solutions.
The development of this new tool has relied on Microsoft’s AI technology infrastructure and large language models.
Microsoft UK & Ireland Software Company Partnerships director Chris Tuite said: ”By building on Microsoft’s secure AI infrastructure, IRIS is helping UK accounting practices work more efficiently and accurately during their most demanding season by making AI insights available in the flow of work.”
The launch comes after IRIS’s acquisition of Dext last year, a company specialising in bookkeeping software that uses AI to automate routine administrative activities.
