Sole Traders Turn to AI for Tax and Accounting Advice

WHY THIS MATTERS: The surging reliance of UK sole traders on Generative AI for financial and tax guidance is a critical signal for the FinTech sector. This Starling Bank research confirms that speed and cost are driving a consumer behavior shift, where entrepreneurs prioritize instant, free AI information over expensive, slow human advice for lower-level tasks. This trend is accelerating the movement toward AI-Assisted Accounting and highlights a significant gap in Financial Inclusion for microbusinesses. When a quarter of sole traders are using AI to check professional advice, it indicates a trust deficit and an urgent need for banks and software providers to embed regulatory compliance tools directly into the platforms entrepreneurs already use. This digital migration is a clear competitive differentiator.

Starling Bank reveals new research today which shows sole traders’ growing reliance on AI for financial advice. A quarter (26%) have used an AI platform for guidance on HMRC’s new Making Tax Digital initiative, while one in five regularly use it for tax and accounting support. The vast majority said they trust advice from AI (88%), with 55% expecting to rely on it more in the year ahead. 

Speed of information is the top reason sole traders are choosing AI (39%), ahead of concerns about the cost of professional advice (32%). Many are embracing AI to help with low-level, day-to-day financial tasks while still using human advisers for more complicated problems. In about a quarter of cases (26%), sole traders are turning to AI for a second opinion on the advice they’ve been given. 

Daniel Hogan, Director of Business Tools at Starling, said: “These findings are a call to action for all those who work with sole traders, showing that we need to find faster and more convenient ways to deliver the support they need. At Starling, we’re committed to playing our part with digital tools that help sole traders blast through their admin, leaving them more time to grow their businesses and to manage complex issues with their professional advisers.”

This research comes out alongside Starling’s launch of its free Accounting software package, which includes its HMRC-recognised ‘Making Tax Digital for Income Tax’ tool. As well as managing their tax reporting directly through Starling, sole traders can categorise transactions as they happen and see a real-time picture of their finances. 

Dr Emily Durling, a clinical psychologist and Starling customer, said: “AI platforms are not usually where I’d get tax information from, but they were useful for searching about the Making Tax Digital changes. It may be helpful in future for low-level research, but for more serious advice I’ll stick with the experts. 

“It’s great that Starling has created a free HMRC-recognised Making Tax Digital tool for sole traders like me. It’s taken a weight off my mind.” 

Starling is committed to helping sole traders move beyond manual, time-consuming processes. Its digital tools, in-app insights and free solutions help provide real-time financial literacy and clarity – allowing ambitious entrepreneurs to quickly understand their key metrics, save time and money, and focus on converting their strong ambition into scalable business success.

FF NEWS TAKE: Starling’s decision to bake free, HMRC-recognised accounting into its platform is a major competitive move in Embedded Finance. This not only drives customer stickiness but actively reduces the addressable market for third-party accounting software vendors targeting microbusinesses. We anticipate this trend—where banks give away compliance tools for free—will intensify. The next area to watch is how traditional accountants and larger SaaS providers respond to this direct, disruptive threat to their base revenue models.