Starling Bank’s software as a service (SaaS) subsidiary, Engine by Starling, has recently announced its first two international clients. To support our international expansion plans we are carrying out several tax projects, including location planning, new overseas payrolls, transfer pricing of intra-group supplies and considering how best to structure operations from a corporation tax and VAT perspective. It has kept us very busy!
If you could make one change to a tax law or practice, what would it be?
I have spent a disproportionate amount of time thinking about VAT since joining Starling, so the main change I would make is to streamline VAT processes. I would do this by allowing large businesses to determine how best to account for VAT through the VAT returns, rather than requiring HMRC approval at every juncture, which in practice often takes far too long to receive.
Specifically, I would: (1) allow groups to decide when to create a VAT group and which entities to include in it; (2) allow businesses to design, implement and update their own partial exemption special methods; and (3) allow businesses to retrospectively amend and resubmit VAT returns by self-assessment rather than through an error correction process.
This could save considerable resources for both sides – and free up time for HMRC to focus on checking VAT returns and recovery methods, and challenging aggressive behaviour.
What do you know now that you wish you’d known at the start of your career?
I spent the first 11 years of my career at HMRC, and I wished then that I understood business transactions from a much wider context rather than through the lens of a corporation tax specialist. For example, if working on a significant transaction today, it is difficult to make sensible commercial or tax decisions unless you fill a room with tax specialists, accountants, lawyers, regulatory specialists and strategy teams.
Once the in-depth tax analysis has been prepared, it is then subject to scrutiny by the Board and its various committees, the shareholders and their legal and tax advisors, and both internal and external auditors post-completion.
I think it would have been enormously helpful to understand the end-to-end process, the cross-tax impacts and the many steps involved in arriving at a structure or implementation plan that meets everyone’s needs.
What immediate challenge did you face when you moved in-house?
My career before moving in-house centred on corporation tax and operational taxes. As I was Starling Bank’s first dedicated tax hire, I had to very quickly get up to speed on other taxes, namely VAT, employment taxes and employee share schemes. I’ve since grown the tax team and hired some excellent senior managers to support me in each of the main tax areas. However, I’m pleased that I now feel comfortable talking about and dealing with issues across the taxes.
What development are you looking out for in 2024?
As a growing digital bank with a new SaaS business, Engine by Starling, we carry out a lot of research and development. We are currently planning for the R&D relief changes being introduced in April and working out how we comply with HMRC’s significantly increased data requirements without over-burdening our software engineers. The expansion of the relief to new types of expenditure is very welcome; however, we are conscious of the increased HMRC compliance activity suggested by the government, and question whether HMRC has enough inspectors with software experience to understand the type of R&D we carry out.
You might not know this about me but...
Before going into tax, I had considered a career in architecture. While I gave up on that idea a long time ago, I have recently greatly enjoyed creating my own 2D and 3D extension plans, going through a very complex process to obtain planning permission, and completing phase one of a larger building project.
Starling Bank’s software as a service (SaaS) subsidiary, Engine by Starling, has recently announced its first two international clients. To support our international expansion plans we are carrying out several tax projects, including location planning, new overseas payrolls, transfer pricing of intra-group supplies and considering how best to structure operations from a corporation tax and VAT perspective. It has kept us very busy!
If you could make one change to a tax law or practice, what would it be?
I have spent a disproportionate amount of time thinking about VAT since joining Starling, so the main change I would make is to streamline VAT processes. I would do this by allowing large businesses to determine how best to account for VAT through the VAT returns, rather than requiring HMRC approval at every juncture, which in practice often takes far too long to receive.
Specifically, I would: (1) allow groups to decide when to create a VAT group and which entities to include in it; (2) allow businesses to design, implement and update their own partial exemption special methods; and (3) allow businesses to retrospectively amend and resubmit VAT returns by self-assessment rather than through an error correction process.
This could save considerable resources for both sides – and free up time for HMRC to focus on checking VAT returns and recovery methods, and challenging aggressive behaviour.
What do you know now that you wish you’d known at the start of your career?
I spent the first 11 years of my career at HMRC, and I wished then that I understood business transactions from a much wider context rather than through the lens of a corporation tax specialist. For example, if working on a significant transaction today, it is difficult to make sensible commercial or tax decisions unless you fill a room with tax specialists, accountants, lawyers, regulatory specialists and strategy teams.
Once the in-depth tax analysis has been prepared, it is then subject to scrutiny by the Board and its various committees, the shareholders and their legal and tax advisors, and both internal and external auditors post-completion.
I think it would have been enormously helpful to understand the end-to-end process, the cross-tax impacts and the many steps involved in arriving at a structure or implementation plan that meets everyone’s needs.
What immediate challenge did you face when you moved in-house?
My career before moving in-house centred on corporation tax and operational taxes. As I was Starling Bank’s first dedicated tax hire, I had to very quickly get up to speed on other taxes, namely VAT, employment taxes and employee share schemes. I’ve since grown the tax team and hired some excellent senior managers to support me in each of the main tax areas. However, I’m pleased that I now feel comfortable talking about and dealing with issues across the taxes.
What development are you looking out for in 2024?
As a growing digital bank with a new SaaS business, Engine by Starling, we carry out a lot of research and development. We are currently planning for the R&D relief changes being introduced in April and working out how we comply with HMRC’s significantly increased data requirements without over-burdening our software engineers. The expansion of the relief to new types of expenditure is very welcome; however, we are conscious of the increased HMRC compliance activity suggested by the government, and question whether HMRC has enough inspectors with software experience to understand the type of R&D we carry out.
You might not know this about me but...
Before going into tax, I had considered a career in architecture. While I gave up on that idea a long time ago, I have recently greatly enjoyed creating my own 2D and 3D extension plans, going through a very complex process to obtain planning permission, and completing phase one of a larger building project.
