The Challenge: As with many property companies, British Land has a huge number of individual tax returns to submit. They often contain relatively small amounts of information but are manually intensive, requiring plenty of manpower that could usefully be deployed elsewhere.
Smith & Williamson (S&W) has sought to make greater use of robotic automation to help companies such as British Land deal more effectively with their tax compliance. In doing so, they aim to submit returns with greater accuracy
British Land has around 300 tax computations to submit each year, of which the majority are straightforward and formulaic. S&W designed, implemented and ran a robotic automation process for the submission of around 240 of its tax computations ahead of the pre-Christmas deadline in 2019. The remaining, more complex calculations were filed manually.
For British Land, it provided a more sustainable long-term solution than simply hiring temporary staff to ensure the submissions were completed on time.
Designing the process took around two weeks. We had a tightly-planned kick-off meeting, where expectations were set and roles assigned. This was vital to ensure that everyone involved knew exactly what they had to submit, to whom and when. This was followed up with process notes that were given to the team, along with screenshots from those involved in the submission process. The aim at all stages was to minimise disruption for British Land, so the process was customised to work round its existing systems.
Within the first four days of operation, 72% of the work had been processed. For context, this would normally have taken two weeks. Importantly, much of the ‘work’, i.e. the robotic processing, took place over weekends and in the evening. On one Saturday before Christmas, 72 returns were submitted.
The control sheet confirmed which returns had been submitted. This data could then be passed on to British Land’s Head of Tax and Group Financial Controller so they were kept up to date.
Of course, there were glitches, usually as a result of differences between the name on the control sheet and the name in the tax system. This required some manual tweaking but these problems were ironed out quickly.
Having been through the process once, we expect a far clearer run next time around. This year, British Land also plans to investigate whether or not some of the more complex returns can be automated.
The group found there were fewer HMRC queries for this year’s accounts, suggesting that accuracy may have been improved by robotic submissions.
Benefit to the client
The benefits for British Land were clear: fewer resources were needed to process the lion’s share of returns. Fewer queries from HMRC meant less time spent resolving problems. This has meant a far lighter burden on the tax compliance team for the group.
This may prove particularly important in a year when the pandemic has disrupted accounts production. The process will start much later in 2021 and the group may not submit its first returns until January. Robotic automation has removed a significant source of anxiety in an already difficult period. We believe other property groups with a similarly onerous tax compliance process may want to consider adopting robotics.
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By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
Tax legislation is that prevailing at the time, is subject to change without notice and depends on individual circumstances. Clients should always seek appropriate tax advice before making decisions. HMRC Tax Year 2021/22.