MTD for VAT: A Practical Seminar
Last week, Arkk sponsored knect365’s MTD for VAT: A Practical Seminar. We’ve taken the key highlights to present four things you need to know about Tax Transformation ahead of Making Tax Digital’s first reporting deadline.
If there was one takeaway from Tuesday’s event, it was to understand the opportunity available under the Making Tax Digital umbrella. For many, tax processes have been built on systems that worked perfectly 7-10 years ago (back when in the commercial world, iPhones had only just started employing GPS capabilities and the App store was in its infancy). With the addition of more spreadsheets and steps, the once simple tax process now requires legacy knowledge to complete, which can be difficult to manage as team members change.
Seen as a once in a lifetime opportunity to improve the VAT returns process, the benefits of automation are significant. If utilising machine learning to check line items automatically seems like a huge transformation, it’s worth keeping in mind the digital link requirements for 2020. The need to show:
- data quality
- data sources
- all systems used
- proof of the journey taken to arrive at the final 9 figures
will be difficult to manage manually, especially when creating an audit trail of adjustments.
At a minimum, firms must have an API linking their current VAT process to HMRC’s new Making Tax Digital portal. At the seminar, one presenter described the API link as the last 2% of the process, with speakers urging attendees to think; how could you use technology to meet your broader challenges?
Going beyond the API link and considering what will work across accounting, other reporting requirements, and future changes will create greater buy-in for your tax technology roadmap. Also, this shift in thinking will ensure that tax transformation becomes a real priority.
Excel is here to stay
When polled, all delegates agreed they relied on Excel and point solutions for their reporting to some extent, with an average score of 79% reliance on spreadsheet software. Whilst tax transformation means considering how to streamline reporting (especially with HMRC’s digital link requirement on the horizon), it’s clear that any solution must work in part with Excel, the software relied on by almost all tax experts in one way or another.
Strategies for Success
The attendees were also asked if technology was a strategic tactic for success as a tax department. Over 80% agreed that technology was central to their strategy, but 57% also admitted that they have no official strategy or roadmap for their tax department.
This is a typical response we’re seeing – for some, Making Tax Digital represents the first time a real investment and strategic approach has been required for tax departments, forcing firms to consider their approach to reporting for 2019 and beyond.
If you’re thinking about how to go beyond the API and transform your approach to tax, get in touch with the Arkk Solutions team today.