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.

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.

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?

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

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.

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.