Software startup TaxScouts has raised £300,000 to develop its tax preparation platform in the UK.
TaxScouts was designed to help clients with their tax preparation for a flat rate of £99. That agressive price point may sound like a threat to many personal tax practitioners, but TaxScouts co-founder and CEO Mart Abramov told AccountingWEB this was not the intention.
“Quite the opposite; we see them as our partners as we're relying on them for tax expertise. We're a software platform that focuses on admin reduction for accountants,” he said.
“In reality our biggest competitor is probably HMRC, in the sense that HMRC lets you get your tax return done online, but lacks the advice that accountants provide. We are trying to combine both things.”
Abramov started the company with former colleagues at fintech companies TransferWise and MarketInvoice. He got the idea for TaxScouts when completing his self assessment return for the first time after moving to the UK: “I got a great accountant who helped me. But what I realised is that most of the time we were doing admin, such as sending the documents and emails, preparing the information that I needed to send my accountant and so on. The real value that I felt that I got from him was his advice.
“I sensed there was a problem I could solve. I discussed it with my now co-founders and we thought that we could automate most of this admin, making computers do the repetitive tasks and freeing time for the accountants to do what they are best at, which is helping people.”
Self assessment automation
To make the process easier for both the accountant and the client, TaxScouts pulls information from online sources when available. "A lot of information that is needed from the taxpayer is available digitally in one form or another” explained Abramov.
When information is not available online, TaxScouts allows the client to submit documents by taking a picture with their smartphone. The platform then matches the client with an accountant. By the time the client starts communicating with the accountant, the adviser has all the necessary information to start preparing the tax return and provide advice to the client.
At the moment, TaxScouts caters for the self-employed and people who have to do their tax returns for various other reasons. “For example, investors who have invested in a crowdfunding platform, landlords or people who live abroad, as they can’t use HMRC’s online system. They have found that our platform is a convenient way of doing their tax return,” said Abramov.
For the immediate future, Abramov prioritises automation: “Most of the work is focused on client onboarding and information gathering, such as automatic agent authorisation with HMRC, knowing your clients and pulling together client tax documents. We want to be the platform that allows accountants to automate the process of client onboarding.
“Bookkeeping is not our focus; for that we'd prefer to work with partners. That being said, MTD is going to be a significant opportunity for us further down the line.”