With advances in technology being rapidly adopted and Brexit finally arriving, 2021 was always going to be a defining year for Tax departments. Factor in the volatility of 2020’s global pandemic and its impact on economies worldwide, and there’s plenty for Tax professionals to focus on this year.
We reached out to a number of Tax Leaders to understand their principal areas of focus for this year and what they will be prioritising in the short and medium term. Whatever challenges they highlighted, almost all of them emphasised the same theme: the need to maintain a flexible approach given the rate of change in the sector and the world at large at the moment. Here are three responses that cover some interesting points:
“Our main priorities will be picking up some of the projects we had to put on hold due to COVID-19, as well as some of the “day job” enhancements that we have had to similarly overlook over the course of the last year. We will also need to keep a close eye on any potential US tax reform, as well as developments in the OECD’s work around the digitalisation of the economy. All that said, I’m keen to focus on only what we really need to do, as there is a real risk of burnout across the team following an extraordinary 2020, and we cannot continue at the same pace.”
“Tax departments will need to deal with the aftermath of COVID-19, whether that is increased taxes to support the economy or increased scrutiny from HMRC given their light-touch business risk review processes in 2020. For companies severely impacted by the pandemic, there will continue to be cash flow issues, as well as effective use of losses and consideration around the recognition of deferred tax assets. Tax departments will also need to work closely with the business to help inform commercial changes as the business recover.”
“The onset of tax technology is very exciting and will be a key priority for all indirect tax departments. There will also be added complexities with implementing indirect tax control and process for all exports and imports, direct or indirect due to Brexit. Particularly, businesses heavily impacted by COVID-19, cash flow will continue to be of great importance.”
Many respondents cited changes in tax legislation or even full-on tax reforms in the wake of the pandemic, Brexit and the change in the US Presidency. There are not only cash-flow issues for countless organisations to consider, but governments are in huge deficits and will want to focus on revenue, which could result in a more aggressive stance by tax authorities worldwide. Remaining compliant with any changes and responding to audits is going to be a challenge in itself if there is a backlog from 2020 or there have been changes in headcount / departmental structures. That buzzword “flexibility” could be the most accurate prediction we’ve ever had in our surveys to date.
