Tax technology
Businesses must innovate and identify more efficient ways of meeting the ever-expanding needs of today, while also tackling tomorrow's challenges. Through the use of technology, tax teams can focus on high value work and distribute more relevant information, contributing to overall business success.
The challenge
We are starting to witness changes that will profoundly disrupt the tax industry forever. Tax authorities are increasingly going digital - e.g. Making Tax Digital (MTD), Country by Country, Common Reporting Standard (CRS) - and developing new tax policies requiring increased transparency and sharing of data.
Increased burden
The burden is on the tax department of businesses to report more data than they have ever had to before. Tax regimes such as Foreign Account Tax Compliance Act (FATCA), Common Reporting Standard (CRS), Base Erosion and Profit Shifting (BEPS) and the EU directive on cross-border tax arrangements (DAC6) place a huge data burden on the tax department to sort through data and then report digitally.
Making Tax Digital
The global reality is that Making Tax Digital is merely 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 data and processes.
The solution
Smith & Williamson assists businesses with understanding their processes and creating efficiencies using technology; for example, reviewing process requirements can include scoping, design, and implementation of tax software. We have extensive experience with many of the prominent tax technologies available.
Our services include advising clients on adopting technologies which help reduce effort and streamline their compliance processes. We can also assist businesses in using their data more efficiently for the purposes of management reporting and business insights. Through the use of visually appealing dashboards, businesses can gain insights into their tax position and analyse trends based on past performance and future predications.
Typical solutions include Robotic Process Automation (RPA), evaluation and implementation of enterprise, and tax applications and management reporting dashboards.
Robotic Process Automation
RPA software is a powerful tool that can perform manual, time-consuming, rules-based tasks, more efficiently than humans. For example, it is estimated that 15 minutes of human time is equal to one minute of robot time.
Use Robotic Process Automation to gather, collate and validate information including;
- Data extraction
- Data administration
- Data processing
- Tax computations
- Form processing
- Document management
The ease of deployment and the speed of processes open the doors of agility to businesses. By deploying RPA processes at the departmental level, they can support repetitive processes, thus achieving efficiencies and cost savings while preserving flexibility. These types of processes are especially common in tax, finance and accounting, HR and form processing, but can also be found in all parts of a business.
Benefits of Robotic Process automation
Re-focus your workforce in value-add processes and motivate them by removing the mundane tasks from their day to day work.
Realise a 24/7 workforce, that saves you time by speeding up processes. Utilise the best mix of prompted and routinely scheduled processes to ensure continuity of tasks, even beyond business hours.
Maximise output and deliver more for less. Through RPA you can produce more, analyse more, control more…DO MORE
Meet your regulatory requirements and deadlines by using RPA to facilitate the preparation, consolidation and filing of tax and company returns.
Remove key person dependency, and the associated risk, while also creating task mobility and eliminating human errors.
Data Analytics
Data is everywhere. It is one of the most valuable assets a company owns.
By collating information from across their organisation and industry, businesses can gain a better understanding of their activities as well as insight into potential improvements and efficiencies. Advanced analytics tools assist in challenging these business assumptions.
Smith & Williamson can work with you to conduct data analytics and generate rapid business intelligence. Benefits to your business include improvements in tax reporting, better decision-making, cost reductions and identifying your tax trends.
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.
Make the necessary alterations to your business, ensuring minimal loss of time, resource and funds.
Turn everyday information into useful and actionable insights, allowing you to make better decisions at the right time.
Identify potential risk and opportunities, leading to better profitability, turnaround and quality.
Making Tax Digital
MTD is HM Revenue & Customs’ (HMRC’s) strategy to modernise the tax system. As well as improving HMRC’s own internal systems, MTD involves mandatory digital record keeping and reporting by taxpayers.
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What is Tax Technology?
Building a high performing and future proof tax function is critical to business success.
Effective use of technology, including automation, data management, and analytics, is a key component to making any business successful. Businesses must innovate and identify more efficient ways of meeting the ever-expanding needs of today, while tackling tomorrow's challenges. Through the use of technology, finance and tax teams can focus on high value work and distribute more relevant information, contributing to overall business success.
At S&W we have dedicated team focusing on helping our clients achieve their tax technology strategy.
Learn more about tax technology
How is technology changing the authorities approaches to taxation?
Future plans will see Tax Authorities using big data analytics and artificial intelligence to fight against tax evasion and fraud as well as create new taxes.
Digitalisation of tax is not just being driven by technology but also legislation, with more countries moving away from periodic assessments towards real-time or transactional compliance.
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 digitally.
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 taxpayers. Future plans will see tax authorities using big data analytics and artificial intelligence to fight against tax evasion and fraud as well as in creating new taxes.
Everyone from the self-employed and SMEs to global and national institutions will find that their relationship with the HMRC will soon look and operate very differently.
Do we really need technology in our tax or finance function?
Technology paves the way to handling business and legislative challenges in an effective, efficient and most importantly, accurate way.
Regulatory reporting requirements are increasingly complex. The volume and complexity of the data that has to be collated, processed and communicated are increasing.
Technology paves the way to handling these challenges in an effective and efficient way.
There are some questions you should ask yourself to help understand if you could benefit from adopting a more technology.
- Are your compliance processes efficient, accurate and streamlined?
- Do your tax provision, compliance, and planning processes help mitigate risk and have a clear audit trail?
- Are you getting optimal output from your tax or finance department?
- Do you have a clear understanding of your total tax liability?
What does ‘digitalised tax function’ mean to me?
There are several key areas that a digitalised tax function should look to deliver to any and every organisation.
A digitalised tax and finance function should look to deliver the following efficiently, accurately and effectively for any organisation;
- standardised data structure and architecture;
- improved data quality;
- the capability to run detailed data analytics and visualisation;
- process automation and the increased use of robotics
- integration of emerging technologies including harnessing cloud capabilities and application programming nterfaces to gather and transfer data seamlessly.
- Governance dashboards and workflow management
Surely the technology moves so quickly that it’s out of date by the time it goes live in my business?
The need to manage and maintain technology solutions means that they never sit still. They are never the ‘final’ version deployed.
The legislative landscape changes daily, weekly, monthly, annually, depending on which country you are based in and to which reporting requirements you and your business need to respond.
Technology platforms are constantly being updated to deal with changes in legislation and add capabilities as new reporting requirements are introduced by local authorities.
As reporting requirements become more complex, so technology becomes more suitable to ensure that individuals and businesses can sign off to confirm that they are:
- compliant;
- accurate;
- demonstrating reasonable care;
- able to respond easily to change;
- able to provide fully auditable data sets to local authorities.
Does technology enablement mean lengthy and costly projects?
There is a natural assumption that technology projects will be time consuming, resource intensive and heavily invasive, impacting all current processes.
Technology improvement can be looked at in 2 different ways, The first is a large transformational project that will impact people, processes and technology in the organisation over, typically, 2-3 years.
The other is taking small steps and making minor changes across regular 2-6-week sprints. . Each small change made to the technology system improves a small part of a process or function and is far less invasive and less costly than a major transformational exercise.
The benefit of regular sprints and the ‘small steps’ approach is that the transformation of a business can be as large or small as it needs to be.
