Businesses in the UK are transforming to future-proof their tax functions against mounting challenges to the way they operate, according to the latest EY tax and finance operations survey, Realising the value of your tax and finance function.
The survey canvassed 1,650 tax and finance leaders globally and over 100 in the UK. It found that 92% of UK organisations are planning to transform their tax and finance functions over the next two years versus 84% globally to tackle critical challenges related to talent, regulation and technology, and budget constraints.
The findings also show that the covid pandemic has served as a catalyst for change, with 88% of those surveyed saying that they are focusing on efficient tax and finance operating models and 86% saying they are co-sourcing select tax and finance activities. Almost all the leaders surveyed (97%) say they are reallocating budget so that they can focus on strategic priorities – a similar number to those globally.
Globally, 55% of respondents say they will face additional tax and reporting obligations in the coming years because of a more geographically dispersed workforce and the ‘work from anywhere’ response to the covid, adding unanticipated complexity to their tax compliance obligations.
95% of the business leaders surveyed pointed to a skills gap in the tax function and believe there is a need for tax and finance professionals to update their skills in relation to data, processes and technology over the next two years if they are to keep up with the fast pace of change.
These pressures are compounded by the volume and pace of global tax reforms, including the development of new global minimum tax rules. Almost one-third of respondents said uncertainty about their ability to identify, evaluate and respond to looming regulatory and legislative change is the biggest barrier to success and are concerned about increasing costs.
In the UK, 65% say compliance with new digital tax filing obligations will ramp up expenditures, and 86% expect to spend at least US$5m and an average of US$9.7m over the coming five years, to help ensure they adhere to the new rules. 96% of UK companies plan to reduce the costs of their tax and finance functions in the next two years. Nevertheless, most still plan to invest, with 60% saying they intend to spend US$2m or more on tax technology over the next three years.
There is growing pressure to play a bigger role in helping their organisations address environmental, social and governance objectives with three fifths of respondents said environmental and climate risks are the most important ESG issues facing their organisation in the next two years.
Jeff Soar, EY’s UK Managing Partner, Tax & Law, says: ‘The COVID-19 pandemic has accelerated the drive to transform. Businesses are under enormous pressure to bring added value to their organisations while meeting their essential tax compliance obligations’.
Businesses in the UK are transforming to future-proof their tax functions against mounting challenges to the way they operate, according to the latest EY tax and finance operations survey, Realising the value of your tax and finance function.
The survey canvassed 1,650 tax and finance leaders globally and over 100 in the UK. It found that 92% of UK organisations are planning to transform their tax and finance functions over the next two years versus 84% globally to tackle critical challenges related to talent, regulation and technology, and budget constraints.
The findings also show that the covid pandemic has served as a catalyst for change, with 88% of those surveyed saying that they are focusing on efficient tax and finance operating models and 86% saying they are co-sourcing select tax and finance activities. Almost all the leaders surveyed (97%) say they are reallocating budget so that they can focus on strategic priorities – a similar number to those globally.
Globally, 55% of respondents say they will face additional tax and reporting obligations in the coming years because of a more geographically dispersed workforce and the ‘work from anywhere’ response to the covid, adding unanticipated complexity to their tax compliance obligations.
95% of the business leaders surveyed pointed to a skills gap in the tax function and believe there is a need for tax and finance professionals to update their skills in relation to data, processes and technology over the next two years if they are to keep up with the fast pace of change.
These pressures are compounded by the volume and pace of global tax reforms, including the development of new global minimum tax rules. Almost one-third of respondents said uncertainty about their ability to identify, evaluate and respond to looming regulatory and legislative change is the biggest barrier to success and are concerned about increasing costs.
In the UK, 65% say compliance with new digital tax filing obligations will ramp up expenditures, and 86% expect to spend at least US$5m and an average of US$9.7m over the coming five years, to help ensure they adhere to the new rules. 96% of UK companies plan to reduce the costs of their tax and finance functions in the next two years. Nevertheless, most still plan to invest, with 60% saying they intend to spend US$2m or more on tax technology over the next three years.
There is growing pressure to play a bigger role in helping their organisations address environmental, social and governance objectives with three fifths of respondents said environmental and climate risks are the most important ESG issues facing their organisation in the next two years.
Jeff Soar, EY’s UK Managing Partner, Tax & Law, says: ‘The COVID-19 pandemic has accelerated the drive to transform. Businesses are under enormous pressure to bring added value to their organisations while meeting their essential tax compliance obligations’.
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