What does this mean for tax compliance as optimistic CEOs look to return to growth?

CEOs believe there will be a quicker than expected return to growth once countries and economies recover from the COVID-19 pandemic. According to PwC’s 24th annual CEO survey, more than three quarters of UK CEOs (77%) believe global economic growth will improve in the next year. Most CEOs plan to seize this opportunity by pursuing organic growth in 2021. This could be achieved through increased operational efficiency, new markets, or launching new products and services.

This expansion trend will:

• Accelerate the increasing tax compliance burden for companies.
• You should press tax professionals to partner with the company to help you achieve these growth goals.
• As part of the greater focus on operational efficiency (cited by 70% UK CEOs), shine a spotlight upon the efficiency of tax departments that will support organic growth.

These challenges will require tax functions to be more innovative and efficient in their management of the compliance burden as well as play a greater strategic role in the business.

A growing tax compliance burden

Growing often means additional compliance requirements. This could include entering new markets or launching new products. These are all happening against the backdrop of increasingly stringent tax regimes, which have shorter deadlines, new rules and increased emphasis on data quality in tax returns.

Companies must be able respond quickly and keep up with the tax authorities’ increased scrutiny. Failure to comply with the tax authorities could lead to a loss of trust and reputation.

Companies must be able to quickly respond and scale up tax compliance controls and procedures.

Being a business partner and ensuring tax compliance

Tax functions must have access to high-quality data that can be used in business modeling to support their desire for growth. They should be able advise businesses on the implications of growth for cashflow, reporting, and tax assets.

Tax departments require a wider range of compliance data than those that are used to manage day-to-day compliance. They must also be able to fulfill this expanded role.

Data and technology are essential for ensuring compliance.

Initiatives like Making tax digital in the UK demand that companies provide data in a specific format and, increasingly in real-time. The technology used by tax departments is being examined by tax authorities to determine if it can deliver tax compliance.

Tax functions must know where their data comes from so they can ensure quality right from the source to the tax return. Smarter technology use will be required to test and clean data. This will help achieve data quality and efficiency.

Tax departments will need to be more efficient in order to make the most of their resources and without significant investment. How can they increase their resources and use new technology to do this while keeping compliance costs low?

Are you up to the challenge?

These are key questions that will help you determine how well your tax department is prepared to support growth.

• Is it possible to meet your cost targets, while compliance costs rise?
• How resistant is your tax function against changes in strategy or external factors?
• Are you able to scale up your operations in order to meet a larger number of tax regulations?
• Can you give a solid response to tax authorities’ compliance questions?
• Are you able to quickly access high-quality data?
• Are you able to get the insight you need for your business from tax data?

Contact us to find out how we can assist your company to rapidly scale up its resources and meet increasing tax compliance requirements; creating meaningful value for you and improving efficiency.