In Gary Elden v HMRC [2026] TC09742, the First Tier Tribunal (FTT) found that significant procedural failings, exacerbated by the unverified use of Artificial Intelligence (AI) by Mr Elden's accountants, posed serious risks to the fairness of proceedings. Nevertheless, it refused HMRC's strike-out application.
Mr Gary Elden appealed Closure notices issued by HMRC for tax years 2013-24 and 2014-25.
- The notices concerned:
- Taxation of dividends on 510,000 SThree PLC shares used as collateral for a personal loan.
- Capital Gains Tax on the disposal of a property in the 2023-14 tax year.
- HMRC and the tribunal corresponded throughout with Mr Elden's accountants, a firm regulated by the Institute of Chartered Accountants in England and Wales (ICAEW).
- A long series of missed deadlines occurred, including:
- Late provision of further and better particulars.
- Failure to submit the list of documents by the deadline.
- Repeated failure to supply three missing documents.
- No witness statement by the directed date.
- Late and inconsistent responses to procedural directions.
- HMRC attempted to provide the hearing bundle via the Secure Data Exchange Service (SDES), but Mr Elden's accountants failed to retrieve it and did not notify HMRC of non-receipt.
- In January 2025, HMRC applied for Mr Elden's appeal to be struck out.
- In September 2025, HMRC raised concerns that Mr Elden's skeleton argument contained AI-generated material, including inaccurate case summaries and irrelevant authorities.
- At the hearing, Mr Elden stated he had not contributed to the skeleton argument and relied fully on his accountants. Mr Elden's accountants neither confirmed nor denied the use of AI.
- After circulation of the draft judgement, Mr Elden's accountants admitted AI had been used, explaining errors as "human editing and document-control at the final stage under acute time pressure".
The First Tier Tribunal (FTT) found that:
- There were repeated and substantial failures to comply with directions, causing significant delays in case management.
- Mr Elden's accountants gave conflicting explanations for missing documents and demonstrated a misunderstanding of basic tribunal procedures, including the role of witness statements and document exchange.
- HMRC's emails had been correctly sent and received by Mr Elden's accountants' server.
- HMRC's bundle had been successfully uploaded and made available, but the accountants had not shown diligence in obtaining it.
- AI had been used in preparing Mr Elden's skeleton argument.
- AI-generated summaries of cases were materially inaccurate, irrelevant or misleading.
- Mr Elden's accountants had failed to properly verify AI output, amounting to professional incompetence for a regulated accountant.
Drawing on the guidance in Ayinde and Al-Haroun, the FTT stressed that generative AI tools:
- May produce plausible but false or invented material.
- Are incapable of reliable legal research.
- Must be treated with appropriate oversight.
- Require professionals to verify all outputs against authoritative sources.
The FTT:
- Emphasised the serious risks to the administration of justice posed by unverified AI content, especially when produced by professionals who owe a duty of competence to the tribunal and their clients.
- Expressed concern that misuse of AI could lead to referrals to professional bodies, particularly where submissions fall below expected ethical or technical standards.
The FTT accepted that Mr Elden himself was largely unaware of procedural failings but noted he should have realised from correspondence that deadlines were being missed.
- Because Mr Elden attended the strike-out hearing and expressed the intention to comply in future, the FTT declined to assume continued non-compliance.
- Two 'Will Unless Orders' were issued, requiring prompt production of a compliant witness statement and confirmed receipt of the HMRC bundle.
- Failure of either will result in an automatic strike-out.
- The FTT directed that future skeleton arguments must include:
- Full judgments for every case cited.
- Direct quotations with paragraph references.
- A statement of truth identifying AI use and confirming verification.
- Identification of all contributors and their professional regulators.
HMRC's strike-out application was refused.
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