AI 'slop' in the books: The rising cost of fixing chatbot errors
January 8, 2026
As "AI slop" invades the ledger, a new Dext study reveals that half of UK firms have already suffered financial losses due to rogue chatbot advice. With 2026 looming as a potential breaking point for business failures, we examine why the profession is making an urgent call for regulation.
The UK accountancy profession has spent much of the last two years debating the efficiency gains of Artificial Intelligence. But as we enter 2026, the conversation has shifted from “how can AI help us?” to “how do we stop AI from sinking our clients?”
New research released by Dext reveals a sobering reality: the honeymoon period with general-purpose AI is over, replaced by a trail of financial wreckage. According to a survey of 500 UK accountants and bookkeepers, 50% of firms have already seen clients suffer direct financial losses due to reliance on “ChatGPT-style” tax and financial advice.
With a third of practitioners warning that this trend could trigger a wave of business failures this year, the industry is no longer just asking for caution; it is demanding regulation.
The Cost of “Hallucinated” Compliance
The data suggests that British SMEs are increasingly bypassing professional consultation in favour of instant, often incorrect, chatbot responses. This isn’t just a matter of minor typos; we are seeing systemic errors in core compliance areas.
Top AI-Generated Errors Reported by Accountants:
• Incorrect Business Expenses: 46%
• VAT Miscalculations: 41%
• Flawed Personal Tax Planning: 35%
• Payroll & Business Tax Errors: 34%
The financial impact is tangible. These errors manifest as overpaid tax, missed capital allowances, and most dangerously HMRC penalties. For a small business operating on thin margins, a botched VAT filing based on an LLM’s “hallucination” isn’t just a headache; it’s an insolvency risk.
The “Hidden” Productivity Tax
For the firms themselves, the “AI slop” finding its way into the books is creating a massive secondary problem: the cleanup.
While AI is promised as a time-saver, 93% of accountants now spend significant portions of their month fixing AI-driven mistakes. Nearly 40% of practitioners are losing between 4 and 10 hours per week unravelling incorrect data.
“The damage is no longer hypothetical,” says Paul Lodder, VP of Accounting Product Strategy at Dext. “Accountants are spending valuable time correcting avoidable mistakes… there’s a fundamental difference between specialist tools built for accounting and general-purpose chatbots.”
A Growing Defiance in the Client Base
Perhaps most concerning for the long-term health of the profession is the shift in client attitudes. The research notes that 72% of accountants have seen an increase in clients using AI outputs to actively challenge professional advice.
We are entering a cycle where “The AI said X” is being used to justify aggressive or fraudulent tax positions. This puts practitioners in a difficult spot, balancing the role of a trusted advisor with the need to act as a “de-programmer” for clients who believe their £20-a-month subscription knows more than a Chartered Accountant.
The Case for Regulation
As we look toward the 2026 fiscal year, the consensus among the frontline is clear: 92% of accountants call for regulation or restrictions on public AI tools providing financial advice.
The risks for 2026 are highlighted by four key “Danger Zones”:
1. Increased HMRC Scrutiny: 37% of accountants expect more inquiries due to AI errors.
2. Fraudulent Claims: 43% expect AI to be used to justify “inappropriate” claims.
3. Insolvency: 33% believe reliance on public AI will lead to business failure.
4. Fines: 38% anticipate a spike in statutory penalties.
The Verdict
The message for the UK’s accounting community is twofold. First, the education gap for clients is wider than we thought; we must reinforce that LLMs are language models, not logic or legislation models. Second, the industry’s call for “guardrails” is no longer a niche concern, it is a matter of economic stability for the SME sector.
In 2026, the most valuable service an accountant can provide might not be the tax return itself, but the human oversight that ensures the “advice” a client found on a chatbot doesn’t lead them to the liquidator.
[Accountancy Age]
