Here’s a question. If I was to tell you that fewer than 70% of UK businesses were fully ready for the government’s most ground-breaking tax initiative in years, would it come as a surprise? And would your next questions be: (a) what on earth is it? and (b) are we ready, back on the ranch? The good news is that you’re not alone. And expert help is at hand.
I’m talking about Making Tax Digital, or MTD for short. Don’t roll your eyes at the thought of another vast government IT project – because MTD is here and it’s real. MTD marks the start of HMRC’s journey to digital transformation, and it’s on track to go live. In fact, MTD is already in its pilot phase, with VAT the first to come online for every VAT-registered business from April 2019. So it’s a worry that a third of the FTSE 250 businesses we surveyed said they were completely unprepared, just nine months out from launch. Time to get a move on.
What’s in it for you?
To me, there’s no point in structuring a new tax reporting regime unless it also delivers a win for business. Entrepreneurs need a regulatory environment that helps enable growth. So HMRC’s digitisation dividend comes in the form of an efficiency and productivity boost, as quarterly paper-based processes and repetitious data entry are set to be replaced by automation (en route to real-time reporting), with more than a hint of Machine Learning in the mix. Tomorrow’s VAT will be more streamlined, more accurate and less labour intensive.
So far, so good.
At Arkk Solutions, we provide advanced tax and regtech solutions to a fifth of the FTSE 100 – yet even in this day and age, the admin and reporting of VAT remains a largely manual affair, with Excel still the tool of choice for some of the largest, most complex multinationals. When I looked at the potential of MTD together with the team here, we saw the prospect of a step-change in process automation and time-saving, with a few gnarly business problems to solve along the way.
From AI comes transformation
Inspired by a panel of our leading customers and guided by the team responsible for our iXBRL software, we’ve mapped out and built a whole new VAT platform. And yes, we’ve kept Excel compatibility at the heart of our solution. Now, 18 months on from our initial discussions about MTD, it’s ready to go in its Beta version, with V1.0 coming in October.
Accountability and traceability mean everything in the new reporting world of MTD. So we’ve built a solution that’s fully joined-up, complete with an audit trail. With one eye fixed firmly on the real-time future of reporting, our new platform goes much further than enabling compliance. It can help transform your entire finance function with the help of AI. We’ve already put machine learning to use, taking the sting (and time) out of cleaning-up data. And there’s more smart stuff to come.
For MTD, the journey to a more seamless, on-demand future has begun in earnest. And it’s so much more than a functional shift. Next up, it’s the turn of Corporation Tax to get the digital treatment from 2020 onwards. In the meantime, to harness the transformational potential of MTD (and streamline your VAT processes in time for the looming deadline), drop me a line.