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PARTLY

As of 13 August 2026, AI can only partly check the VAT codes on your transactions.

This still needs a person who signs their name to it.

Can you do it?

15 minutesto a draft.

1 hourto something you’d act on.

Cost, all in£0

Skill neededpower-user

Who has to check ityou

What the alternative costsA purpose-built bookkeeping tool such as Booke AI can help with categorisation, reconciliation and client queries.

If this goes wrong, incorrect VAT coding can flow into your bookkeeping and VAT return, leaving your business to correct the records and deal with any resulting tax liability.

What to actually do

  1. Hand it to a person

    The route this page recommends

    A person who owns the outcome does this end to end, worth it when the failure is dear.

  2. Use a tool built for this

    Second choice

  3. Do it yourself

    The distant third

    A chat interface, power-user skill, and roughly 1 hour until you can act on the result.

    How to actually do it

    1. Export the relevant transactions from your bookkeeping or banking system with the date, supplier or customer, description, amount, currency, existing VAT code and transaction reference.
    2. Open the original invoices, credit notes and import or export documents for the transactions, then remove unrelated personal data before attaching or pasting them.
    3. Paste the transaction export, supporting documents and your current VAT code list into the prompt, and state whether the business is VAT registered and whether it uses any special VAT scheme.
    4. Ask the AI to classify every line, retain the existing code where the evidence supports it, and mark missing facts and unusual treatments as NEEDS HUMAN REVIEW.
    5. Compare each proposed code and explanation with the source invoice, the supply actually received or made, and the relevant HMRC VAT notice identified by the AI.
    6. Correct the codes in your bookkeeping system only for the items you can support, and send the exceptions list and source documents to your accountant or UK VAT adviser before including disputed items in a VAT return.

    Prompt

    Check the VAT codes in the transaction table below against the attached invoices and supporting notes. Use only the facts supplied and do not invent missing details. For each transaction, return: transaction reference, proposed VAT code, VAT treatment in plain English, confidence level, the evidence used, and a short reason. If the correct treatment depends on facts not supplied, mark it as NEEDS HUMAN REVIEW and list the exact fact required. Separate domestic purchases, domestic sales, imports, exports, reverse-charge transactions, exempt items, zero-rated items, outside-the-scope items and mixed or unclear cases where the evidence supports doing so. Do not decide a VAT treatment solely from a supplier name or transaction description. Do not guess a VAT rate or code. Where a conclusion depends on current UK rules, identify the relevant HMRC source or VAT notice to check, without presenting an unverified rule as certain. Produce a final exceptions list for a VAT-registered UK business. This is not professional advice. Data: [paste the transaction export]. Supporting documents and current VAT code list: [paste or attach them].

    Open it prefilled in ChatGPT or Claude, or copy it into Gemini, which takes no prefill link.

What it gets wrong

  • AI cannot infer the real nature of a purchase when the invoice description is vague or the transaction covers mixed supplies.
  • AI cannot establish facts that are absent from the ledger, such as where a supply took place, who used it or whether an import condition applies.
  • AI cannot take responsibility for the VAT treatment submitted by your business.
  • AI cannot replace an accountant or UK VAT adviser for unusual, material or disputed transactions.
  • AI cannot make an uncertain VAT code safe merely by assigning a confidence label.

What caps this at PARTLY: judgement under ambiguity, verification cost and legal accountability.

How we scored this

Five axes, each scored nought to two by hand: ten means AI carries the task cleanly, and the thresholds that turn a total into YES, PARTLY or NO are published in the methodology. Each axis name links to its definition.

AxisScore (0–2)
Output2
Inputs1
Verification1
Liability1
Effort delta2
Total7 / 10

The methodology and its thresholds are published in full.

FAQ

Can ChatGPT check VAT codes for me?
Yes, it can compare transaction lines and invoices with your VAT code list and produce a reviewable set of suggestions. It should flag missing facts and unusual cases rather than guessing, and you remain responsible for the codes used in your records.
Can AI tell me which VAT code to use?
It can suggest a code when the invoice and transaction facts are clear. It cannot reliably resolve ambiguous supplies, mixed transactions or missing evidence, so check the result against HMRC guidance and ask a UK VAT accountant about serious or disputed cases.
Is it safe to upload my transactions to AI?
Only use a service whose data handling you have checked, and remove unnecessary customer, supplier and bank details before uploading. This is not professional advice, and you should follow your organisation's data protection rules before sharing financial records.
Do I still need an accountant if AI checks my VAT codes?
For routine, well-documented transactions, AI can reduce the mechanical checking work. You still need an accountant or UK VAT adviser for uncertain, unusual or material treatments and for responsibility over the VAT return.

Nearby answers

All Bookkeeping & reconciliation rulings

Assessed by gpt-5.6-luna (gpt-5.6-luna) on 2026-08-13, second-checked by an independent model. Wrong somewhere? Email [email protected] and it gets re-checked.

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