S&W Sessions are a regular series of thought provoking hot topic webinars that are relevant to your business.
In a world where regulatory reporting is becoming increasingly demanding, with stringent requirements and timelines, organisations must utilise technology to ensure they are compliant.
Making Tax Digital (MTD) is merely part of a much wider trend involving the global digitalisation of tax. This trend should be embraced as a unique opportunity for the tax function to capitalise on technological advancements and gain control over its data and processes.
Please watch the webinar below to learn more about how technology is transforming the tax function, including the use of robotics to automate processes and data analytics to understand trends in your tax position.
The webinar touches upon the following;
- Overview of tax technology landscape
- Tax Technology and MTD
- Robotic Process Automation
- Data Analytics
- How can we help?
The Digital age of Tax
- Increased regulation - The burden is on the tax department of organisations to report more data than they have ever before. Tax regimes such as FATCA, CRS, BEPS and DAC6 place a huge data burden on the tax department to sort through data and then report digitaly
- More scrutiny - Tax authorities are collecting more data, in more detail, more often but the interesting part is they are using this data to understand, evaluate and analyse tax payers. Some tax authorities are in fact creating new taxes using data and analytics as the bases
- Making Tax Digital - The global reality is that MTD is mereley part of a much wider trend involving the global digitalisation of tax. This trend should be embraced for a unique opportunity for the tax function to capitalise on technological advancements and gain control over its data and proceeses.
Technology landscapeWe are starting to witness changes that will profoundly disrupt the tax industry over the next few years.
- HMRC reporting and channels are increasingly going digital (e.g. MTD, CBC, CRS)
- Investment in technology and data interrogation solutions to support revenue raising activity
- Tax policies are requiring increased transparency and sharing of data
- Review and understand new tax legislation's weigh up insource vs outsource
- Review of budgets and personnel to counter new tax compliance requirements
- Global transparency and regimes such as GDPR have already placed more scrutiny on company operations and internal controls
- Additional stringent reporting requirements and timelines that put strain on already stretched staff
- Process automation and data analytics likely to be the change to how we do compliance
- Tax function is being asked to do more with same or less resource meaning review of current skill set and identify training needs
What should tax functions focus on?The definition of Tax technology is very broad so there needs to be a clear Tax technology strategy focused around;
- Automate the most painful parts of your process
- Automate Tax compliance and reporting activities and identify key outputs around forecasting, Tax returns and e-filings
- Streamline and improve existing workflows, through RPA or similar automation
- Automate data collection and processing
- Hone in on your data sets; automation can cleanse and analyse your data
- Enhance source business systems, ERP systems and gradually move away from spreadsheets as data sources
MTD VATMTD VAT is live, you must use an API to submit your VAT return. Have you got a solution?
- 9 boxes of VAT return submitted via API onlin
- The HMRC online portal will not be available where MTD is mandatory
- If current online systems are not currently MTD compliant, new software will be required.
Robotic Process Automation
What is Robotic Process Automation (RPA)Robotic Process Automation is the technology that allows a configured computer software, or a "robot" to emulate and integrate the actions of a human interacting within systems
|Computer coded software||Automate data entry|
|Enable automation of rule based repetitive processes||System to system processing|
|Work across functions and systems in a single process||Process reconciliations|
|Mimic human actions on systems||Process Business and regulatory rules|
RPA benefits for Tax
Automate processes and decision-making to do more, in less time, at less cost across the Tax function;
- Risk - Remove key person dependency and the associated risk whilst also realising task mobility and eliminate human errors
- Regulatory - Meet your regulatory requirements and deadlines by using RPA to facilitate in preparation, consolidation and filing of tax and company returns.
- Output - Maximise output and deliver more for less. Through RPA you can produce more, analyse more, control more... DO MORE
- Time - Realise a 24/7 workforce, that saves you time by speeding up processes. Utilise the best mix of prompted and routinely schedule process to ensure continuity of tasks even beyond business hours.
- Focus - Re-focus your workforce in value add process and motivate them by removing the mundane tasks from their day to day
Business case for automation
Key considerations when building a business case for RPA
- How will RPA contribute to the wider tax strategy
- A more lean and process efficient function can contribute to the overall strategy of the business as well as help drive the tax strategy
- The reduction of human involvement certainly reduces the risk of human errors with tax filings/ reports
- RPA also reduces key person dependency risks
Monitor and Report
- It is essential to regularly monitor and report on benefits as an ongoing basis. Benefits will continue to be realised as long as the process remains relevant
- A single robot or process may not replace FTE(s) therefore ensure you have quantified actual benefits
- This could be increased capacity of staff due to time savings
- Reduced third party supplier fees due to more complete / faster outputs.
What is data analytics
Tax data can be split into three categories;
Operations data refers to the data surrounding your daily operations. Might include things like ;
- What is the current status of certain tax filings/ payments/ appeals?
- What is the accrued tax?
Tracking how much you pay on an annual basis will help you do predictive tax analytics, estimating how much you'll pay in taxes for an upcoming fiscal year or quarter
Management analytics refers to analysing the data surround your function for better insight into value creation. Examples include;
- Headcount vs output
- General financial data (e.g. Financial Statements)
- Industry analyst reports and benchmarking
3. StrategyStrategic data shows how well your tax department or service is performing. For example:
- How much did you pay in taxes last year vs. this year? If your business has grown, have the taxes relative to the investment increased or decreased?
- Are there any new jurisdictions in scope that were not previously? What are the risks?
Benefits of Data Analytics
Companies can now collate information from across their organisation and industry. This gives them a serious competitive advantage in seeing where improvements are needed. Advanced analytics tools enable deeper insights and discovery that can challenge business assumptions.
- Tax reporting - Improve efficiency and accuracy of global tax reporting to effectively manage existing and new legislation, such as FATCA, CRS, MTD, DAC6, BEPs and many more
- Decision Making- Data analytics will help turn everyday information into useful and actionable insights which in turn means you'll make better decisions at the right time
- Cost Reduction - By understanding your organisation, you can make the necesary alterations to your business ensuring minimal wastage of time, resource and funds
- Opportunities - By understanding your organisation better you can identify potential risk and opportunities thus leading to a better profitability or turn around or quality etc.
Connect your organisation through data, imagine the power of seamless information sharing on real time basis. This will allow for collaboration across all departments and unlock the power of your workforce
- Quantify- Improve commerciality and efficiency across operations, from the supply chain to sales and marketing
- Forecast- Predict future workplace demands, deploy your workforce in the most effective way and transform productivity
- Real time- Track real time progression of tasks, deals and operations. Unleash a new wave or productivity by understanding where sources should be focused as priorities change.
How Smith & Williamson can help
Our structured and connected approach ensures your Tax technology strategy can be achieved.
- We can help define a clear and achievable tax technology strategy ensuring there are clear defined goals and measures
- We are able to develop tax logical robotic processes which will facilitate your tax compliance programme
- We can isolate individual processes and automate them, you would not need to tear apart the whole tax function
- We are able to conceptualise workflows to reduce key person dependencies and make processes efficient
- We can automate tax reporting, tax account and entity tracking to allow personnel to refocus their time
- Understand and produce various info grams, dashboards and stategic information for boards using our scripts in PowerBi
Register for the next S&W Session