What can personal tax automation do for your accounting firm? 

This is now made possible through Intelligent Automation, giving accountants the ability to automate the personal tax return process; from collating documents, to submitting to HMRC.  

The benefits of personal tax automation? Time and cost savings.  

In this blog, we look at:

• What personal tax automation is.
• The benefits of personal tax automation.
• A case study that includes potential cost savings when using our Personal Tax Automation tool, powered by FD Intelligence. This is part of CCH Personal Tax.

Please note, when calculating savings, we look at just the basic savings. On top of this you’re also freeing up more time to offer consultancy and advisory services—both additional revenue-generating opportunities.

What is personal tax automation? 

Personal tax automation uses artificial intelligence and robot technology to automate and streamline the process of preparing and filing personal tax returns through the deployment of virtual workers. In other words, your very own personal tax assistant is working 24-7 on your client portfolio.  

These virtual personal tax assistants handle a variety of tasks traditionally done manually, such as:

• Collating documents and identifying and extracting tax-related information from a simple one-page P60 through to 200-page tax packs.
• Entering all the data accurately in CCH Personal Tax
• Preparing and filing tax returns.
• Identifying potential deductions and credits e.g. double tax relief.
• Calculating tax liabilities.

How do accountants benefit from personal tax automation?

Personal tax automation technology reduces the need for manual and hands-on processes by leveraging artificial intelligence, algorithms and machine learning, to process vast amounts of data quickly and accurately. This makes it faster and more accurate than what any human assistant could achieve.

8 benefits of using personal tax automation tools  

1. Increased efficiency and productivity 
   
   Personal tax automation significantly reduces the time spent on routine tasks.  Automation tools quickly arrange data, perform calculations, and generate tax returns—giving time back to accountants. Instead of spending your day doing the manual work, you’re free to focus on value-add tasks such as advisory.
    
2. Improved accuracy and reduced errors 
   
   Manual tax preparation is prone to human error. This can lead to costly mistakes and client dissatisfaction. 
   
   Automated systems are designed to minimise these errors by ensuring data is entered correctly and calculations are accurate which leads to more precise tax returns and fewer issues.  
    
3.  Improved employee satisfaction
   
   The removal of hours of repetitive data entry that needs to be carried out on each client makes for happier tax advisors and allows the team to focus on the client’s tax affairs and tax planning opportunities.
    
4. Cost savings
   
   By automating routine tasks, you can make cost savings for your practice, allowing you to offer competitive pricing to your clients or invest in other areas of your business. We give examples of potential cost savings below.
    
5. Enhanced client experience
   
   Personal tax automation allows you to provide faster turnaround times and more accurate tax returns, in line with clients’ high expectations. Automated systems may also offer clients real-time insights into their tax status, improving transparency and trust.
    
6. Ability to offer value-added services
   
   With the time saved through automation, you can focus on providing more value-add services. This may include tax planning, financial consulting, and business advisory.
   
   These services not only generate higher revenue but also strengthen your client relationships by addressing their broader financial needs.
    
7.  Scalability
   
   As your practice grows, handling an increasing number of clients can become challenging. Personal tax automation enables you to scale your operations efficiently, as you don’t necessarily need to hire more staff as your grow—for example, during the changes that come with MTD for income tax. This means you keep up with clients’ needs, without drastically increasing costs. 
    
8. Data security 
   
   Automated tax systems are designed with robust security features to protect sensitive client information. With encryption, secure access controls, and regular updates, they safeguard your business’ data against breaches and cyber threats. This ensures compliance with data protection regulations.

Potential practice savings from using a personal tax automation tool 

Our Personal Tax Automation Tool, powered by FD Intelligence, is an intelligent automation system for CCH Personal Tax. It automates the extraction and categorisation of tax data from client documents, cutting the time spent by advisers on manual processes.  

We use intelligent automation for personal tax clients, to help your accountancy practice streamline your tax processes, improve efficiency, reduce errors, and save costs. With virtual personal tax assistants, you can process more tax returns in less time, while ensuring compliance with tax regulations and freeing up staff to focus on higher-value tasks.

Cost savings* from personal tax automation (example)

It is assumed in the following calculations that the tax accountant uses our Personal Tax Automation Tool (part of CCH Personal Tax) for 12,000 tax returns. These 12,000 returns fall into the categories of simple, moderate, and complex. 
It is assumed in the following calculations that the tax accountant uses our Personal Tax Automation Tool (part of CCH Personal Tax) for 12,000 tax returns. These 12,000 returns fall into the categories of simple, moderate, and complex.

The chart below explains expected savings:

It’s assumed that the work is completed by a “blended employee” (i.e.an estimate of the FTE cost of the individuals necessary to complete the return). The individual costs (including NIC and Pension) £60,000 pa and is available for work 1,725 hours per year. That blended individual’s charge out rate is assumed to be £150 p/h.

Chargeable time recovered

Assuming 100% recovery and a £150 charge-out rate, the time savings detailed above, and the 12,000 returns split as detailed above, then £6.03m of chargeable time (after the costs of our Personal Tax Automation Tool) would be recovered. That is, assuming the automation tool does the work, and the time cost is still recovered 100%.

Potential employee cost savings

Assuming the 12,000 tax returns breakdown as set out above, our Personal Tax Automation Tool would perform the equivalent of 42,600 hours of work which would previously have been done by a member of staff. Based on an employee cost of £35 per available working hour, this would be a gross saving of £1.48m, and a net saving after the cost of the automation tool, of £1.1m.

Interested in our Personal Tax Automation Tool, powered by FD Intelligence? Learn more.

* For the avoidance of doubt, these savings are not warranted by Wolters Kluwer UK Ltd, FD Intelligence Ltd, nor any member of its staff. However, based on the assumptions outlined and the calculations made, it’s clear that by using the automation tool, a firm can secure substantial cost savings.