Kendra Hann and Donna Huggard report on a growing awareness of VAT at board level
At the end of 2013, Deloitte undertook a survey of UK indirect tax professionals, to gauge their views on their priorities and the current indirect tax environment. It was the second such survey Deloitte has carried out. Over 100 indirect tax professionals participated from a wide range of industries and two-thirds of the respondents work in companies with a turnover exceeding £500 million.
The survey showed that the majority (more than 70%) of respondents have met with HMRC to discuss VAT in the past year. Close to two-thirds of respondents have not received an assessment from HMRC. Encouragingly, 80% of respondents reported that their relationship with HMRC is excellent or good, with 94% of respondents reporting that their relationship with HMRC has remained consistent or improved over the past year.
There seems to be a growing awareness of VAT at board and senior management level, with 65% of respondents reporting that VAT has been discussed at that level (an 8% increase from last year’s survey). Also, 55% of respondents reported that they had to justify their indirect tax strategy to internal stakeholders (such as board members, other members of the tax function, personnel outside the tax function, and commercial teams). Sometimes, indirect tax is only discussed with senior management or the board when a particular issue arises, such as a significant partial exemption review, a restructuring, or an opportunity arising from a change in the law or from a recent court decision. In other cases, VAT is discussed on a more regular basis.
Nearly 70% of respondents said that indirect tax was adequately integrated within their organisation, with 15% reporting that indirect tax is well integrated. This is an encouraging figure, but raises the question of whether ‘adequate’ is sufficient. With a VAT rate of 20% in the UK and rates trending upwards around the world and an increased focus on penalties and regulatory obligations, it is important for the indirect tax function to be well-integrated into the organisation as a whole.
When asked about their top three priorities, respondents cited compliance and improving systems as their primary focus. Increasing the profile of indirect tax within the business was a secondary objective for many respondents.
When asked about their top indicators of success, the timely and accurate submission of VAT returns and certainty around tax liabilities and penalties were identified as the key indicators. In short, the most important indicators of success are making sure returns are submitted on time and that there are no surprises. Integrating with the rest of the business and a good relationship with the tax authorities were also found to be strong indicators of success for an indirect tax function.
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Growing awareness of VAT at board level
Kendra Hann and Donna Huggard report on a growing awareness of VAT at board level
At the end of 2013, Deloitte undertook a survey of UK indirect tax professionals, to gauge their views on their priorities and the current indirect tax environment. It was the second such survey Deloitte has carried out. Over 100 indirect tax professionals participated from a wide range of industries and two-thirds of the respondents work in companies with a turnover exceeding £500 million.
The survey showed that the majority (more than 70%) of respondents have met with HMRC to discuss VAT in the past year. Close to two-thirds of respondents have not received an assessment from HMRC. Encouragingly, 80% of respondents reported that their relationship with HMRC is excellent or good, with 94% of respondents reporting that their relationship with HMRC has remained consistent or improved over the past year.
There seems to be a growing awareness of VAT at board and senior management level, with 65% of respondents reporting that VAT has been discussed at that level (an 8% increase from last year’s survey). Also, 55% of respondents reported that they had to justify their indirect tax strategy to internal stakeholders (such as board members, other members of the tax function, personnel outside the tax function, and commercial teams). Sometimes, indirect tax is only discussed with senior management or the board when a particular issue arises, such as a significant partial exemption review, a restructuring, or an opportunity arising from a change in the law or from a recent court decision. In other cases, VAT is discussed on a more regular basis.
Nearly 70% of respondents said that indirect tax was adequately integrated within their organisation, with 15% reporting that indirect tax is well integrated. This is an encouraging figure, but raises the question of whether ‘adequate’ is sufficient. With a VAT rate of 20% in the UK and rates trending upwards around the world and an increased focus on penalties and regulatory obligations, it is important for the indirect tax function to be well-integrated into the organisation as a whole.
When asked about their top three priorities, respondents cited compliance and improving systems as their primary focus. Increasing the profile of indirect tax within the business was a secondary objective for many respondents.
When asked about their top indicators of success, the timely and accurate submission of VAT returns and certainty around tax liabilities and penalties were identified as the key indicators. In short, the most important indicators of success are making sure returns are submitted on time and that there are no surprises. Integrating with the rest of the business and a good relationship with the tax authorities were also found to be strong indicators of success for an indirect tax function.
