Interview with: Alex Baulf - Associate Director, Global Tax Automation, Grant Thornton
Alex is an Associate Director specializing in International Indirect Tax (VAT/GST), leading Grant Thornton's Global Tax Automation and Tax Technology service offerings in the UK and EMEA. Alex has over 11 years' experience in UK/EU VAT and international indirect tax consultancy - including a secondment to Chicago, USA where he advised multinationals on the international VAT/GST implications of their footprint and supply chain.
Q. You have a leadership role at Grant Thornton in the Global Tax Automation & Technology team. Please give us an overview of the scope of the services of your team.
Yes I lead Grant Thornton's Global Tax Automation and Technology team in the UK. We advise businesses in the UK, EMEA and globally on indirect tax process, technology and data. We help blueprint a client's global VAT/GST policy and define this in their ERP or billing systems (during an implementation, an upgrade or part of a wider transformation project), as well as in a tax engine like Vertex or ONESOURCE. We implement a variety of tax technology tools for clients across the indirect tax lifecycle, from tax determination to compliance. Our team are all international indirect tax specialists and are therefore extremely close to the tax technical requirements and pressure points our clients face. We are also a lead user of IDEA data analytics software (we developed it!), and use this to replicate tests on client's tax data that HMRC and other global tax authorities would run at audit, as well as seeking to uncover cash and cash flow opportunities.
Q. Please give us an example of a project that you have advised on recently.
A recent project that we have been involved in was the lead global tax role for a large finance and IT transformation project in the Middle East. We led tax requirement gathering across a number of countries and then produced requirement documentation for the lead implementer to follow and a gap analysis for the client to either make a tax policy decision or seek a solution using either people, process, technology or data. We worked closely with our international indirect tax network across the globe to really understand local requirements and then sought to create a global and scalable approach to meeting these. We have continued to advise on the future tax technology strategy and developing a roadmap for the client.
Q. You have a background specialising in indirect tax. What led to your move to specialise in the tax systems space?
It actually started when I was seconded to Grant Thornton's US member firm in Chicago - an awesome opportunity that was presented to me back in 2010. I moved into a Global VAT/GST role and started advising US headquartered businesses on indirect tax requirements across 75+ countries. The major projects were more focused on the tax function itself, rather than more granular standalone queries. I started working alongside our US based indirect tax automation team (with whom I still collaborate on large global projects today!) and was involved in a 100+ country implementation of ONESOURCE for a Fortune 20 company. When I returned to the UK, I knew that this was the future and I sought to develop the offering for Grant Thornton in the UK and EMEA. Not everyone "gets" tax technology at first and its often a journey - but it's now a key part of our growth strategy and our offerings to our clients globally.
Q. What's your view on the relative merits of installing tax engine software such as ONESOURCE or Vertex verses an in-house built system or the ERP delivering the data and reporting.
I still believe that an ERP system is generally the best single source of truth - for both finance and tax. However, a third party tax engine can bring many benefits and can really add value. Not only does a tax engine provide for automated updates of rates, but it also allows a tax policy to really be designed and implemented in a scalable manner. But tax engines are not plug and play and are only as good as the quality of the original design, implementation and testing. Upstream tax data is key and this needs to be complete and of quality to allow a correct tax determination decision to be made. We are seeing ERP companies take a duel approach to tax compliance now, both working alongside the tax automation vendors to allow them to develop better integrations, but also increasing native functionality around both determination and compliance.
Q. How do you think Brexit will impact the tax technology market in the UK?
Good question. I think people have been quick to say system changes will be a key impact of Brexit. However, until we know what a post-Brexit tax environment and supply chain looks like, we won't know what changes need to be made. While businesses may not be able to benefit from some simplifications e.g. triangulation, and therefore the tax treatment of a transaction may change, most systems will already have similar use cases and tax codes already set-up. Of course, these changes still need to be assessed, made in the system and tested. I'd say the bigger immediate impact to the tax technology market in the UK will be HMRC's Making Tax Digital agenda. Businesses will need to have greater confidence in their tax data and will need to find a technology solution to submit VAT data direct.
Q. What trends are you currently seeing from clients in terms of their needs on indirect tax technology & automation?
I'm certainly seeing a great appetite to consider tax technology in the UK and Europe. Historically there was a push and pressure from a US parent down to European subsidiaries, now I'm seeing genuine interest from UK companies wanting to explore automation themselves.
Clients are aware that they need specialist support, a trusted partner for a tax technology project not only to challenge themselves in terms of current tax policy and how this should reflected in their system, but also the vendors so there is real clarity on what the technology can and can't do.
Tax sensitised data is the buzz phrase at the moment, and we're seeing an increase in clients wanting us to advise on the quality of their data. This often goes much further than just analytics, and we are looking at the quality and granularity of master data and looking to enrich it to meet global requirements.
Q. How would you expect the use of tax technology to evolve over the next 5-10 years?
The last ten years has been a period of acquisitions and consolidation for the technology vendors, whereas the next 5 - 10 years will really focus on the development of the product suites and improved functionality. All 4 of the major tax technology vendors have made game changer strides - from Vertex' successful Indirect Tax Returns product going global, ThomsonReuters' ONESOURCE platforms being updated and modernised with greater synergies and integration, and Avalara and Sovos (fka Taxware) making big splashes in the global VAT automation marketplace.
Tax technology will become the new norm and a must have rather than a nice to have. We will see much smaller businesses deploy specialist tax technology from an early stage, with the solutions scaling with their growth. Every large corporate client will need its own tax technology owner and we'll see the large consultancy firms increase the size of their teams and seek to upskill their tax colleagues.
Q. When recruiting, what key backgrounds or skill areas do you look for when hiring for your team?
Enthusiasm and a "can do" attitude are a must! My view is that you really need to understand the complexities of international indirect tax to be a successful tax technologist. You get to learn a technology product through specialist training but the real deep-knowledge only comes with practice, testing and live project experience. The tax and technology skills may come from industry, from a VAT compliance or IT role, or perhaps a more process driven role using a technology solution in a shared service centre. A programmer may excel at developing a custom integration, but a totally different skillset is required to really chair a kick-off meeting and define the client's requirements. A successful automation team will bring together these different skills and backgrounds into a single project delivery team.
Q. What advice would you give to someone looking to specialise in tax technology / automation?
Don't try to think of tax technology tools as off the shelf products that can just be sold and implemented. Read up on the changing indirect tax landscape and understand the problems, pain points and issues that these tools are looking to remedy. Once you can clearly articulate that, you are in a great position to build your knowledge and experience. If you have the opportunity in your current role, start to get close to tax data, understand where it comes from and how it drives a tax decision and ultimately a number in a tax return. Everyone brings a unique experience and skillset to the table and there are currently lots of opportunities across the UK and globally. I'd be more than happy to have a coffee to discuss!
Q. Outside of your professional work, what's your favourite piece of technology or gadget?
While I should say my Fitbit, in all honesty it's probably my new iPhone and the apps. It's great to be able to order a takeaway in a couple of taps of the phone or resume a boxset on Netflix!