All large corporate groups are likely to have experienced the challenges of ensuring accurate corporate tax returns are filed on time, when starting the preparation process is often dependent on first having audited accounts available. A critical outcome is to ensure that the final tax returns generate no surprises from incorrect filings, especially if subject to future HMRC review. Trying to reduce information inefficiencies between finance and tax and resolving risks around accuracy of information contribute significantly to the optimisation of the corporate tax compliance process. This case study focuses on the experience of a UK based Head of Tax. Upon first taking on the role he was confronted with the responsibility to oversee the preparation of over 60 annual tax corporate returns for local group companies in his division.
This case study reveals the integral role played by adopting a ‘lean’ methodology to re-engineer their annual corporate tax return process. The outcome was that the tax team adopted a “real time” approach to analysing the tax sensitivity of transactions, with input from the finance teams and the rest of the business at the close of each transaction. As a result, the process for delivering accurate and timely tax returns was greatly enhanced, as most of the work to prepare the returns was now being done progressively on a live basis. This compares favourably to the historical approach of having to go back many months to review transactions in a compressed timeframe.
GE had a fiscal year end of December. The cycle for preparing the tax returns each year always historically followed the audit process. With the audit process geared to deliver signed accounts by the Companies House filing deadline of the subsequent September, this meant that there was only a short time to collate all relevant data to support the tax return filings by the December deadline (being 12 months after year end).....
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