Report : UK Tax Software Market Forecast to 2028 - COVID-19 Impact and Country Analysis By Component (Software and Services), Tax Type (Sales Tax, Income Tax, Corporate Tax, and Others), Deployment Type (Cloud and On-Premises), End User (Individual and Commercial), Enterprise Size (Small Enterprises, Medium Enterprises, and Large Enterprises), Industry Vertical (BFSI, Government, IT and Telecom, Healthcare, Retail, and Others)
According to our latest study on "UK Tax Software Market Forecast to 2028 – COVID-19 Impact and UK Analysis – by Component, Tax Type, Deployment Type, End User, Enterprise Size, and Industry Vertical," the market is projected to grow from US$ 1,180.13 million in 2022 to US$ 2,038.45 million by 2028; it is estimated to grow at a CAGR of 9.5% from 2022 to 2028.
Continued Demand from Retail Sector Fuels UK Tax Software Market Growth
The retail sector in the UK has experienced a tremendous transformation with the growing trend of online shopping. The continuous introduction of various advanced technological solutions helps retailers increase their efficiency. UK tax software market players catering to this sector maintain an enormous quantity of sensitive data that varies from financial statements, invoices, legal contracts, and e-mails to receipts. In the UK, the retail sector is among the rapidly evolving and essential sectors. The penetration of supply chain technologies, changing competitive landscapes, rising sustainability concerns among customers, and a surge in regulatory pressure are a few of the trends that are facilitating transformation in the retail sector in the UK. With the help of tax automation, retailers can increase efficiency and lower the risk associated with manual tax management. It also assists them in preparing themselves to enter new markets and establish sales channels that drive growth. Many retail companies are opting for cloud-based services. Cloud tax technology offers benefits such as business continuity management (BCM) and cost-reduction, which leads to a lower total ownership cost and disaster recovery benefits. In addition, retailers that adopt cloud tax technology are benefitted from cross-channel support (point-of-sale, e-commerce, mobile, etc.), speedy implementation, and scalability as additional advantages. Therefore, the adoption of tax software, especially cloud-based solutions, in the retail sector drives the UK tax software market growth.
Amid the COVID-19 pandemic, the UK government had to borrow huge amounts of money since the government was spending more than it was receiving from taxes. Per the record of government spending maintained by the Office for Budget Responsibility, the country borrowed US$ 483 billion between April 2020 and April 2021. The national insurance, income tax, and VAT together account for over half of the government’s revenue, which shows the declining trajectory after the onset of the COVID-19 pandemic which heavily impacted the UK tax software market growth. Also, the government spent over US$ 122 billion amid the pandemic to safeguard the UK economy. Hence, the country’s tax industry has been adversely impacted and is likely to introduce changes in the rates of income tax and equalize capital gains tax, VAT, Inheritance tax, and corporation tax. Individuals pay less income tax, shoppers pay less VAT because of fewer purchases, and businesses pay less tax in case their profits are less. All these hinderances experienced by the UK government in revenue generation severely affected the UK economy during the COVID-19 crisis. However, the pandemic had a short-term impact on the UK tax software market, which began growing gradually since 2021.
Key Findings of Study:
The UK Tax Software Market is segmented on the basis of component, tax type, deployment type, end user, enterprise size, and industry vertical. Based on component, the UK Tax Software Market is bifurcated into software and services. The UK tax software market, by tax type, is segmented into sales tax, income tax, corporate tax, and others. Based on deployment type, the UK tax software market is bifurcated into cloud and on-premises. In terms of enterprise size, the market is segmented into small enterprises, medium enterprises, and large enterprises. Based on end user, the UK tax software market is segmented into individual, and commercial. The UK tax software market, by industry vertical, is segmented into BFSI, government, IT and telecom, healthcare, retail, and others.
Tax software products are designed to help commercial enterprises and individuals manage their tax returns. These software solutions simplify the tax filing procedure by automatically calculating their tax obligations with given inputs. Tax software products are available in two formats: traditional software format and software as a service (SaaS) format. An increase in digital financial transactions among several industries, the complex nature of an existing tax system, and increased awareness among tax administrators are a few of the major factors propelling the demand for tax software in the UK. Despite spending a lot of time in managing tax compliance, businesses still find it difficult to maintain accuracy in their respective tax filings. This can be due to manual tax calculation practices that are prone to errors. An implementation of advanced automated solution such as tax software can help enterprises tackle challenges associated with income tax returns, such as unproductive and repetitive rate of interest, maintenance of expensive in-house application, and time consuming manual record keeping. The rising awareness regarding the effect of these challenges on the company’s overall tax compliance is driving the growth of the UK tax software market worldwide.
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