From obligation to opportunity: The future of UK corporation tax compliance

Over the past decade, there have been huge strides forward in how businesses deal with their corporation tax compliance.

There's now more visibility and control around compliance obligations, and the use of specialist tax platforms, like Deloitte’s Intela, facilitate greater governance and the ability to obtain valuable insight from compliance-driven data to inform strategic tax decisions. More generally, the use of technology – and automation in its loosest sense – is becoming widespread.

Progress versus pressure

However, the compliance landscape is only going to become increasingly difficult to navigate. There are two reasons for this.

Adam Owen notes: “Firstly, complexity will be driven by regulatory change and growing tax authority expectations. In particular, the OECD’s Tax Administration 3.0 vision, which aims to change how tax compliance works. It means that, at some point in the future, the annual tax return as we know it will disappear.

“Instead of periodic filings, tax will be calculated in ‘real time’ within integrated systems, making compliance a continuous, automated process rather than a once-a-year obligation.”

Some overseas jurisdictions are already moving toward real-time tax calculation within native systems, but for larger and more complex markets, such as the UK, the transition will take longer. And while the timeline is uncertain, the expectation is that businesses will eventually need to adopt this approach to remain compliant.

“Secondly, there’s the rapid acceleration of technology and AI, particularly agentic AI,” Adam adds. “The capability has supercharged over the past 18 months so it’s far beyond anything we’ve seen before. It means the potential for what technology can do is much more than it’s ever been, and that’s only going to continue.”

For corporates , this creates a pivotal choice.

“You can take an incremental approach, building on the progress you’ve already made and adopting new tools gradually,” continues Adam

“Or you can say, ‘tax authorities aren't demanding this of me today, but technology is allowing me to get really close to that position anyway.’ You can fully grasp these advanced technologies and move closer to a future where compliance is automated, integrated and aligned with your priorities.”

The next frontier

If there’s one thing that businesses should be thinking about now, in Adam’s view, it’s the potential of agentic AI.

“It will provide a framework to pull data classification and data enhancement together,” he explains. “This will harness the power of GenAI, which isn’t used extensively within tax compliance today, and bring it into a much more highly automated solution.”

But most businesses really don’t know where to start. While many are experimenting with GenAI tools like CoPilot or ChatGPT, few have a clear strategy for introducing agentic AI into their compliance framework.

“They’re grappling with things like, ‘what does it really mean for me and how do I embed it? How do I make a difference within my organisation? And how do I govern it?’” Adam explains.

Creating a strategic advantage

For our Tax Operate team at Deloitte, we are working with businesses across a range of industries to ensure they can drive opportunity and mitigate risk.

“Firstly, there are compliance-led opportunities,” says Adam. “If you can harness all the data that you've got from the compliance, that will give you insights into the business, whether it’s from a domestic or global perspective.

Secondly, if internally all your bandwidth and capacity is taken up with your compliance obligations, noting that they're getting more complex, then you haven’t got the bandwidth to think about strategic priorities and business partnering. That’s why creating capacity matters.”

As AI becomes an everyday tool for companies, the tax professional is having to adapt too; it requires digital fluency on top of tax technical excellence. For Adam, this raises the critical question that if technology is taking over so much of the process and moving so fast, how do tax teams keep up and maintain their expertise?

Adam believes, in the new world, process will be much more accelerated and automated. But rather than devolving responsibility fully to machines, his view is that businesses will need to partner with advisers that can play three critical roles in transforming compliance:

1. Implementation. Enabling businesses to move from where they are today to a highly automated, agentic solution, whether through outsourcing or implementing technology internally.
2. Assurance and enhancement. Providing the human judgment as an extension of the in-house function that is essential in reviewing, guarding against potential AI inaccuracies and importantly providing strategic thinking and tax expertise beyond what machines can deliver.
3. Managing controversy. Adam explains this as ‘when the corporate bot and the tax authority bot disagree with each other and get to different answers’. Resolving these disputes will require specialists.

While for some the journey is just beginning, the direction is certain: a future powered by automation, real-time reporting and strategic integration – with humans providing assurance and harnessing insights to generate value.

For Adam, one thing is clear, the future isn’t five years away, it’s already here.