With technology being an essential part of our daily lives, along with the growth of Fintech businesses, it comes as no surprise that technology is a fast growing area within taxation. Tax functions are increasingly understanding the value of technology as it enables them to manage risk, drive efficiencies and ultimately improve processes.
Back in 2016, HMRC announced that they wanted to ‘Make Tax Digital’ with a deadline of 2020. Whilst this was quite an unrealistic and ambitious deadline – and was certainly met with some criticism, it was also welcomed by many. The critics cited barriers such as lack of resource, costings of IT infrastructure, training of staff, insufficient time to apply and test the systems and how this all interacts with Brexit were just a few of the concerns raised at that time.
However, HMRC’s stance on this did ignite further interest and investment in both using technology in tax, and also the creation of tax functions that provide advisory services and implement such systems.
Investment in Tax technology
The tax environment has shifted quite dramatically over the years with the only aggressive behaviour now coming from tax authorities and no long from tax planners. The effect? A consistent need for transparency and ease of collecting data for reporting purposes. With BEPS, GAAP, IFRS, Audits, along with increased demand from global tax authorities for accurate data relating to taxes paid and income allocations, its a wonder how businesses will provide this information without the use of technology.
Technology is such a vital part of our lives now, whether we choose to embrace and/or accept it or not, technology in business has so many advantages. For example, It allows for automated data that can be rolled over from year to year, combine and analyse data, and also reduce the need for outsourcing – allowing businesses to keep internal knowledge and data completely in-house, and not to mention it also saves money!
In theory, technology increases accuracy and easier management of data, ensuring tax departments adhere to increasing reporting regulations, sometimes across multiple jurisdictions. The days of relying on an excel spreadsheet are disappearing and it’s now all about dashboards, cloud based systems and ERP migration. Some may feel the use of technology will put their jobs at risk, but this couldn’t be further from the truth. Technology creates opportunity, allowing tax professionals to focus less on the mundane tasks and focus more on the interesting work which adds value!
The other major benefit, which we have all seen this year, is how technology can assist in collaboration both globally and domestically. Here at AVTR, we are no strangers to remote working and can attest to how technology allows our business to work efficiently and allow us to feel like we are a team, and tax functions are no exception to this.
Rewind only five/six years ago, and technology within tax was really only supported by the likes of Thomson Reuters (and their competitors) with the Big 4 making noises. Fast forward to today and the Big 4 have invested significantly in tax transformation service offerings which encompass tax technology, implementation and reporting. It’s an extremely successful and progressive area of tax and has become a welcome enhancement to the culture of these firms.
It’s not just the specialist firms and the Big 4 that have invested however, with firms like BDO hiring an ex Big 4 partner to lead their tax transformation function, and Grant Thornton making some key hires at the senior level, it’s clear that tax transformation is having a ripple effect through the Top tier/Top 10.
Tax transformation is an exciting new field and it paves the way for some exciting careers that tax professionals may not have thought existed at the time they embarked on their career. At AVTR, we are always excited to be instructed to source for tax transformation teams. We feel
these opportunities tend to bridge the gap between practice and in-house as you get to work so closely with a business and help transform their tax function, but maintain the client variety.
If you’d like to discuss in more detail and explore how you might progress your career in this area, then get in touch and I’ll be very happy to help you get there.