The science behind compliance

Tracy Ebdon-Poole explains the strategy and processes that drive TaxCalc’s product development and underpin its corporate ethos.

We’ve all learned the necessity of compliance. Face masks, elbow handshakes, two-metre distancing, remote working, showing up for your jab – it may all be tough and go against impulse, but we understand that we need to comply with the rules.

There is a cost to our society, our economy and our mental health, but putting it bluntly, this is a matter of survival. If anyone is familiar with Maslow’s Hierarchy of Needs, our basic requirements are physiological well-being, plus safety and security. Though we may not agree with every single rule, we have to act en masse to preserve our way of life.

The Oxford English Dictionary defines compliance as ‘the practice of obeying rules or requests made by people in authority’. At school, I wasn’t necessarily the most compliant of students! Perhaps disrupting the status quo is in in the entrepreneur’s genes – and maybe that’s what drew me to Dyson, the idea of revolution, making the ordinary extraordinary.

The same certainly applied when I set up TaxCalc with the desire to revolutionise tax for taxpayers, accountants and finance pros – to remove the mystique and to be a disruptive force that challenged the status quo. When I saw what we could do for tax, it was a logical progression to do the same for other aspects of compliance. And here we are now, 17 years on, the largest and fastest-growing independent in our sector.

Disruptors we may be, but we take the business of compliance, or more accurately, the business of keeping our customers compliant in an ever-changing legislative world, very seriously indeed.

The ongoing investment in updating and maintaining software to meet the regulatory requirements instigated by HMRC is not inconsiderable. With MTD firmly on the horizon, bringing with it the greatest change to our taxation system since the introduction of PAYE following WW2, we are also committing a vast proportion of our existing development capacity to delivering ‘acceptable solutions’, ever-mindful they can change at a moment’s notice, with us bearing all of the upfront costs.

Not only that, due to the size and breadth of our product range we have to monitor and adhere to much more than just legislative announcements from HMRC.

Just to give you an idea of the size of the task in hand, we currently monitor a number of key Government institutions and organisations, including Parliament and Gov.uk, HMRC, Companies House, the Financial Reporting Council, the Auditing Standards Board and the Information Commissioners Office. We assess and analyse long-term policies for digital improvements and transitions, such as MTD and the Companies House Transformation Project, and monitor any announced consultations, such as tax legislation, amendments to the Companies Act, accounting and auditing standards, GDPR/Data Protection, Money Laundering Regulations, and so on.

All this, plus technical changes, such as changes to taxonomies and schemas for reporting information to Companies House and HMRC as well as keeping up to date with changes to their IT systems, such as MTD which requires new submission endpoints, etc.

In addition to gathering legislative and technical information, we also monitor publications from accounting bodies to review recommended best practices and interpretation of these legislative items. Not all changes that effect the software are given headline announcements, so we need to regularly check the above sources and review all significant publications especially Budget documentation and Finance Acts.

Once we’ve assimilated this huge amount of intelligence, we determine what changes, if any, are required. Some legislative changes may not actually impact on the software at all, so will not progress past the initial analysis of the documentation. However, we may produce content for our users if required to assist them, such as a blog or Knowledge Base article, or simply sending out information on social media channels.

Then there are projects that will take much longer and require many refinement sessions and workshops to implement. From here, further analysis is conducted, defining detailed requirements, prototyping and specifications. These involve multiple product, development and technical teams, running through requirements, user journeys, development approaches and liaising with third parties such as the HMRC Software Developer Support Teams.

When we are in agreement and aligned, we move on to software development involving a number of specialised teams and disciplines. And then we test. And test. And test and test, until the software update is ready to release. While this is happening, we brief and mobilise our marketing and support teams to communicate the changes made and to advise customers who may have any queries.

Our byword for the end to end process is the Science Behind Compliance. In some ways it’s therapeutic, being able to give at least a partial insight into the sheer amount of work we collectively put in (and this is just a snapshot, a great deal more goes on at TaxCalc Towers, believe me). This all happening in the background, under strict deadlines.

I’m sure everyone can appreciate that, given the amount of investment and work involved on our side, advance notice of major changes are vital to us – and also to the accountancy community. MTD being the prime example. While I really don’t want to get on a soapbox and berate HMRC, the spate of delays, U-turns, lack of communication and sudden announcements around Making Tax Digital has a major impact on software developers like us who are only trying to deliver products that meet HMRC’s brief. If that brief changes then we have to implement those changes across the business.

I’ll conclude with a plea for clarity, timeliness and transparency from Government, HMRC and other legislators. We don’t keep our customers waiting for updates, that’s one of our cardinal rules. All we want to do is to comply and supply.

• Tracy Ebdon-Poole is Chief Executive of TaxCalc

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