Thursday, 6 April 2017

Corporation Tax Review


For the past two days we have been working with a team to review the Corporation Tax. The problem statement we considered was “The responsibility for identifying corporation tax treatment of activities currently rests with the tax team, this is a complex, high volume process which is entirely manual. The process relies on interpreting vague data and relies on a key member of staff which is a risk to business continuity.”

We mapped the process in a small group prior to the event, which helped us move things forward very quickly. The other members of the project team (not as closely involved in the process) were able to use the current state map to identify problems within the process. The main problem themes we identified were:
·       Lots of spreadsheets
·       Lots of systems
·       Granularity of data (sometimes too much, sometimes too little and provided by many stakeholders)
·       Timing – the process took about nine months and was driven by other processes e.g the publication of the university accounts/ HESA etc
·       Who knows what/ Training and Information – the tax team were using best judgement about primary purpose/non-primary purpose tax activities because the information was not available at source.
The improvements included:
·       Creating a report from the University’s primary financial management system to ensure that 90% of the data could be filtered and identified via one system report.
·       A new field in the finnacial management system to identify non-primary purpose activities at the point of set up (we will use our current data set to back fill the information in the system to avoid people having to manually fill in historical data)
·       Changes in working practices within the tax team to ensure segregation of duties (this removes the need for an external organisation to review)
·       A managed risk approach
Benefits:
A much quicker process (down to three months), with more contingency time built into the process
The tax team are able to add value to the process by ensuring that the system (report) does the identification and data manipulation work

The team have a set of actions that they need to carry out over the next few months, this is going to be hard because the new process cannot be implemented until the next financial year, so they will also have very busy day jobs. I am heartened by their focus and enthusiasm and look forward to supporting them over the coming months.

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