Data Security and Personal Tax Filing: What Accountants Must Know

One of the major concerns for accountants seeking to outsource tax preparation services is data security. With the number of cyber attacks on accounting and finance firms increasing worldwide, data security has become a prime worry while outsourcing.

The Self Assessment tax season is among accountants’ busiest seasons of the year. Despite timely preparations, accountants often face a lack of time and resources during the last quarter of the year. An easy way to reduce this burden is to outsource tax preparation to experienced external professionals.

However, tax return preparation outsourcing involves sharing confidential financial information with a third party, which makes it prone to risk. Let’s understand the importance of data security in personal tax filing and the essential safety standards accountants must look for while choosing an outsourcing partner.

What information does the HMRC collect from taxpayers?

The HMRC collects specific data from each taxpayer during the Self Assessment tax filing process. This data is in accordance with the UK GDPR and Data Protection Act (DPA) 2018.

The data collected includes:

• Personal contact details such as title, name, address, telephone number, and email address
• Gender and marital status
• Bank account details
• National Insurance number
• Employment and income details
• Information about your business
• Information about domestic and business properties
• Driving licence and passport information

Apart from this, the HMRC also collects and stores certain special categories of more sensitive personal data listed here.

When filing a Self Assessment tax return, accountants collect all the above data from their clients. This data is further shared with an outsourcing company when an accountant decides to outsource tax preparation services.

What information do outsourcing companies ask for?

Year by year, the number of accountants outsourcing Self Assessment tax preparation services is increasing. In order to get their clients’ personal tax returns prepared and filed accurately, accountants must submit specific information to their tax preparation outsourcing partner.

This information broadly includes:

• Employment income
• Self-employment and partnership details
• Pension details
• Benefits and allowances
• Income from various sources
• Insurance policies
• Investment details

Here’s a complete checklist of the documents and information essential to filing Self Assessment tax returns.

Important data security standards to look for in an outsourcing partner

When it comes to outsourcing tax preparation work to India or any other offshore destination, accountants must look for certain data security standards. Top outsourcing companies comply with all the essential information security and data protection standards to provide clients with the best services.

Let’s look at the common data security standards crucial to tax preparation outsourcing.

General Data Protection Regulation (GDPR)

The GDPR is a regulation in EU law based on data protection and privacy. It emphasises the lawfulness, fairness, transparency, and accuracy of data and ensures its accountability, integrity, and confidentiality.

While outsourcing tax preparation services, accountants must choose a GDPR-compliant outsourcing firm such as QXAS to ensure complete protection and security of their clients’ data.

ISO 27701

ISO 27701 is a privacy management system that helps organisations to comply with international data protection laws, including GDPR, CCPA, PIPEDA, etc. Accountants choosing to outsource tax preparation services must look for this security standard in their outsourcing partner.

ISO 27001

ISO 27001 is an information security management system that helps minimise security risks and creates a base for compliance with privacy laws. This can create an effective framework for firms to maintain the highest level of security and protect their clients’ sensitive information.

Data Security and QXAS

QXAS is a pioneer accounting outsourcing company providing customised tax preparation outsourcing solutions to a range of clients. We understand the importance of data protection, privacy, and information security for outsourcing and comply with all the major data security standards.

Earlier in 2022, QX was awarded a 100% score in all BSI audits, making us one of the most preferred outsourcing partners for Self Assessment tax preparation outsourcing by accountants in the UK.

QXAS complies with the following standards:

• GDPR and AICPA SOC 2
• ISO 27701
• ISO 27001
• ISO 9001

Why QXAS?

• Dedicated team of highly experienced tax professionals
• Customised pricing and engagement models
• First GDPR and ISO 27701 compliant accounting outsourcing company in India
• Fully compliant with ISO 27001 for information security and ISO 9001 for quality
• Proud winner of 100% score in all BSI audits

To learn more about our services, call us at +44 208-146-0808, drop an email at [email protected], or log on to Outsourced Accounting, Bookkeeping, and Payroll Services | QXAS UK.