Countingup launches SmartTax AI for tax automation

Countingup has introduced SmartTax AI, a machine learning engine designed to automate tax and accounting tasks for small business owners.

SmartTax AI aims to streamline administrative processes such as expense categorisation, the identification of transactions that could create tax risks, and the provision of real-time tax estimates covering VAT, Corporation Tax, and Self Assessment.

The launch responds to the demands on the UK's 5.5 million small businesses, which, according to the Federation of Small Businesses, spend an average of GBP £4,500 and 44 hours annually on tax compliance. Across the sector, this equates to a total of GBP £25 billion and more than 240 million hours spent every year on compliance-related activities.

The new machine learning engine is constructed on a foundation of over eight years and GBP £10 billion worth of aggregated and anonymised data, collected from tens of thousands of small businesses. Countingup states that all data is handled in line with GDPR requirements and customer information cannot be individually identified or sold, prioritising data privacy and security.

"SmartTax AI is the next step in our ambitious roadmap to completely automate accounting and tax for small businesses. We've built this technology as the foundation for a suite of AI-powered tools that will fundamentally shape how self-employed people and small business owners manage their finances," Tom Platt, Countingup's Chief Executive Officer, said.

SmartTax AI uses machine learning to analyse transaction histories and recommend suitable categories for business expenses. The system continually updates its models, improving accuracy as it processes more data. It also generates a shortlist of likely categories when a transaction may carry tax risk, suggesting a review by the business owner.

"Countingup has always looked to leverage technology to help save small business owners time and money. We're combining leading technologies like machine learning and generative AI with the strong data foundation delivered by our existing automated accounting and tax features. SmartTax AI is just the first such initiative to be brought to market, with more being actively worked on by our team," Countingup's Chief Technology Officer, Mike Moate, commented.

The company has also introduced a new Tax Tab within its app to serve as a central point for all tax-related features, including real-time tax estimates that update with every transaction, automated tax saving pots, and personalised tax timelines based on unique business deadlines. Additional features within the Tax Tab include educational content on tax allowances, such as trivial benefits and work-from-home entitlements.

Unlike traditional banking apps, Countingup incorporates tools that facilitate not only day-to-day money management but also accounting and tax operations designed to save small businesses both time and money by proactively automating manual tasks.

SmartTax AI is the first in a series of planned features that aim to help small business owners manage financial administrative tasks more efficiently. As regulatory and compliance pressures continue to change, Countingup's approach is to provide solutions that keep pace with these developments through automation and technology.

"SmartTax AI is the next step in our roadmap to fully automate accounting and tax for small businesses. We're building a platform that understands small businesses and works in the background to save them time and money — this is just the beginning," Tom Platt noted, expanding on the company's strategic direction.

"There's a lot more to come. We're building so much more than another financial app – we're building a platform that understands small businesses and grows with them. Smart, integrated and always working in the background to give back time to small business owners. This is just the beginning," Platt added.