Tax done in 48 hours?
Greater automation between businesses and the tax department could see the time it takes to get a tax return reduced to just 48 hours in the future, according to the head of an online accounting service.
Sue de Bievre, chief executive of Beany, which does the accounts for 2000 small businesses, says the Inland Revenue is moving towards more automation and soon tax returns could involve computers talking to computers cutting out the data entry needed by humans and the timeframe it takes to file returns.
“Xero really changed the game – they have hooked up the banks with small business owners and have worked hard with the IRD.”
“I think what will happen in the future is that it becomes much less transactional when you file a tax return. The AI [artificial intelligence] will search for an exception. There won’t be tax people that look after that data.”
She says it will be good news for a lot of small businesspeople who spend a lot of time filing returns for GST and tax.
“I think that is fantastic. It is time consuming and painful.
“Most people want to be a plumber or builder they don’t want to be an accountant.”
She estimates small businesses currently spend 10 to 20 hours a month on doing accounts, GST, tax, and payment-related activities.
While a medium sized business may spend 20 hours a week on it – enough work to hire someone for a part-time position.
De Bievre said more automation could see tax returns happen as quickly as 24 to 48 hours rather than taking up to 10 weeks – the current maximum timeframe set down by the IRD.
But one downside was that those admin/accounts type jobs may not exist in the future and people may have to re-train.
She said businesses who rely on automation may also run the risk of tax overpayment or not claiming for enough.
“The view is always going to be more interest in the underpayment of tax rather than overpayment.
“I suspect if people underclaim, the revenue [department] is not going to pursue it. That would be of concern for small businesses if they aren’t claiming what they should be.”
Originally Published by the NZ Herald – 20 March 2017