It should come as no surprise to business leaders that we are very much in the digital age, or at the beginning of what the World Economic Forum calls the “Fourth Revolution,” characterized by the mass adoption of digital technologies and processes. Digitisation in the tax world will have many significant advantages, but at what cost?
UK businesses face the challenge of producing a greater volume of VAT returns in a more efficient and accurate way as a result of increasingly stringent scrutiny from HMRC and changes in the EU VAT Directive. Whilst many businesses rely on using Excel to produce VAT returns and manually adjusting data from internal systems before including it on the VAT return, the shift is gradually moving towards a fully automated process which will require less manual work – and ultimately rely on fewer headcount.
Whilst HMRC aims for tax digitisation by 2020, which is intended to integrate businesses’ software with HMRC’s systems to share real time information and automation of the tax return process, it is unclear how VAT reporting fits into these plans. In 2015, 63% of hires in Indirect Tax were for compliance and systems focused roles rather than advisory. We have seen that trend continuing into Q1 of 2016 which would suggest that, as yet, the move towards automation has had little impact on the need to have skilled professionals on the ground.