AI for accountants in the UK: client data, memory and rules

Not in a public tool. ICAEW's generative AI guide says confidentiality means not loading confidential information into public generative AI tools, even if the information has become publicly available. Use an approved business plan, put the rule in writing and keep client names and identifiers out of anything else. Our free policy template covers it.

Free policy template

ICAEW's November 2026 regulatory news ties AI use to the Code of Ethics confidentiality principle, R114.1, which requires accountants to respect the confidentiality of information acquired in professional and business relationships. It tells firms to make sure internal AI policies, procedures and training reflect the Code. It adds that breaking an internal AI policy is reportable only if it is also an identifiable breach of the Code.

On 19 January 2026 the seven PCRT bodies (AAT, ACCA, ATT, CIOT, ICAEW, ICAS and STEP) published topical guidance on the ethical use of AI tools. It applies the five fundamental principles to AI in tax work. Safeguards include disclosing AI use in engagement letters and keeping confidentiality when inputting data. Tax Adviser magazine summarises it as using approved non-public tools wherever possible, with anonymisation where public tools are used.

Each platform says something different, so read the vendor's own wording for your plan. Xero says JAX does not use your data to train AI models. Sage's AI ethics page, a US page, says it analyses product data together with data from other Sage customers to develop and train AI models. Dext says data processed by AI Assist is never used to train external AI models. For QuickBooks and FreeAgent we did not find an explicit UK training statement.

Vendor statements, mostly undated. Confirm for your own plan before relying on them.

It depends on the tool. Microsoft says Copilot memories sit in a hidden folder in the user's Exchange mailbox, that Purview retention policies do not apply to them and that deleting a chat does not delete memories made from it. In our reading, what happens to a leaver's saved memory therefore follows what you do with their mailbox. Add a leaver step to your policy: review AI accounts and saved memories the same day.

Published figures differ and none measures generative AI use alone. ICAEW's report on mid-tier firms (22 May 2026) found 86% of 35 firms said their technology strategy explicitly includes AI. Xero's Cebr and Censuswide research (3 November 2025, 515 UK accountants and bookkeepers, vendor-commissioned) reports 98% of practices use AI in some capacity, which includes AI built into software. In AccountingWEB and Sage's survey of over 600 members in practice and business, 71% used external tools such as ChatGPT, Gemini or Copilot.

The January 2026 PCRT guidance lists disclosing AI use in engagement letters as a safeguard for tax work. The Law Society's guide for solicitors also says to tell clients about AI use. For your own letters, take advice from ICAEW or your professional body on the wording.