21/07/2026
**AI can run the two-fold deductibility test — line by line.**
For each expense, AI applies section 33(1) first, then checks it against the section 39(1) blocked list, and returns a proposed tax treatment before your team even opens the ledger.
- Section 33(1) test: was the expense wholly and exclusively incurred to produce business income?
- Section 39(1) test: does it fall into a blocked or restricted category — capital, private, or entertainment?
- AI applies both tests to every line item and outputs a proposed outcome: deductible, restricted, or not deductible.
- Capital items are automatically routed to capital allowance instead of a straight deduction.
- The practitioner reviews the facts behind each AI-tested item and confirms the final treatment.
AI runs the test. The practitioner confirms the facts and signs off.
General information only, not professional advice.
