International Finance
Investment Magazine September - October 2018

Everything you need to know about TaxScouts

Everything you need to know about TaxScouts
In the fall of 2017, Mart Abramov responded to the unsettling concerns of taxpayers by setting up TaxScouts, a web tool to simplify the filing process

So how did you arrive at the game plan to start TaxScouts?

TaxScouts was established in Autumn 2017. The idea was conceived last Summer over a pint. I was complaining to Dan and Kaupo (my now co-founders) about my first-time tax assessment and the hassle in doing so. I had a great accountant to help me at the time but we mostly exchanged emails and documents. I felt the real value of working with my accountant was in taking his advice, and not the admin side of the task. And then, we looked into what it takes to automate the admin process. This, eventually led us to the establishment of TaxScouts.

Why should taxpayers migrate to your service?

There are three reasons for people to consider TaxScouts: convenience, cost and assurance. Many of our clients who start using the service are first-time tax filers or they simply need help to complete the taxation process. While HMRC’s tax filing is great, it has limitations in extending help. Most web tools are ideal for users with experience. However, taxpayers are still left to their own devices in terms of understanding the requirements from their end.

With TaxScouts, clients can sign up for £99 to get a personal accountant, who is equipped to help them with individual questions and prepare their tax return. This can take place on the web. By clarifying simple questions, we help clients build their tax profile and bring to their attention the potential tax breaks they could benefit from. In fact, the actual paperwork and tax calculations are done by us on their behalf. This ensures the process is done right and is time-saving.

How do you automate the fundamental requirements of tax preparation?

If we’re looking at end-to-end automation, it has two distinct parts: Automation for taxpayers and automation processes for accountants. For accountants sake, we’re going to be automating the admin task that is associated with “on boarding” clients: the manual processes such as KYC, authorising oneself as an accountant with HMRC, scanning the tax documents and retrieving tax data.

For taxpayers, it’s primarily about helping them retrieve tax data and enable a simple web tool to manage the process. We’ve already integrated with HMRC. For example: We can retrieve all employment tax data directly from HMRC. Additionally, we provide convenient means for people to scan their tax documents using their phone and secure them in one place that can be directly accessed by accountants.

In an effort to improve further we’re going to integrate with potential partners, who will enable us to retrieve necessary tax data directly. For example: Uber has integrated great APIs that allow us to automatically calculate mileage they’ve driven, which in effect, is a tax deductible expense.

The website speaks of the services being half robot, half human. Can you elaborate?

This mainly refers to the fact that we’re combining automation and taxation advice provided by accountants. We let our app do the admin-related work that is tedious in nature. This allows our partner accountants to do what they’re best at—that is providing additional help and advice to our clients.  

How is the app’s offering as a digital tax service more efficient than direct filing by a tax consultant?

Efficiencies come from two things: reducing admin task and TaxScouts offering a simple cloud-based tool for tax preparation processes. A lot of this task is otherwise handled in person, by email, or by phone. For example: some accountancy practices still require face-to-face meeting to learn more about their client and bring in their passports. Instead, all of this can be done on web.

What were the first-time challenges faced by your clients and your team while using the app to file returns?

A lot of work we do is about assurance. People seek advice when they’re not what to do with the task. There is a lot of effort invested in designing our service to build a simple web tool that speaks in understandable terms. Taxes and accounting are full of jargons and complexities—and hiding the complexities from taxpayers while offering them effortless ways to complete their taxation has been our major focus and challenge.  

How is the customer fee packaged: on monthly or on yearly basis?

We charge a fixed fee of £99. This is a full service—that includes everything needed to carry out someone’s self-assessment on their behalf.

Do you classify your digital tax services based on premium value?

We don’t offer any premium services at this particular time.

Can you tell us more about your clientele?

There are 10 million people in UK who file their personal tax return every year, and as you can imagine our clientele is very varied. We have the “usual suspects” of among our clients—such as people who are self-employed, people in the gig economy and landlords. But, a lot of investors and entrepreneurs come to us because they want someone to take care of their taxation without being charged hundreds of pounds for the service. Seemingly, expats are also part of our clientele as they earn in the UK, but live abroad. TaxScouts has been a convenient method for them to get their taxes done on the web when they’re unable to use HMRC’s services in the UK.

What has been your clients’ collective feedback on the app?

Feedback from our early clients has been extremely positive. We’re just getting started, but so far we’ve only received five-star reviews on Trustpilot. For us, this is very encouraging and indicates that there is a clear need to for a simple and affordable tax preparation service.

Your company has raised £300,000 to scale up the product. What are your plans in the pipeline for this year and the next?

The work is pretty much defined for us. As I mentioned earlier, a lot of our value-added service comes from automating processes to onboarding a personal accountant. Automating the processes and data collection for both: the accountants and the taxpayers is what will consume most of our effort. We’ve already integrated with HMRC for the purpose of retrieving employment tax data and allowing accountants to authorise themselves as being our clients’ agents. Yet. There is a lot to be done—and we’re currently focused on digitising the KYC process for accountants and working with Uber.

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