Stuart Ringland, Lusona Director specialising in Tax, explains:
It is increasingly difficult for companies to source dependable tax advice for the management of financial affairs that become ever more complex – and it’s clear that, amid a saturated jobs market, the situation is unlikely to improve anytime soon.
A number of factors are now coalescing to send demand for top taxation expertise rocketing, and with the best people being quickly snapped up, it’s creating a worrying talent war that is biting hard with limited supply increasingly failing to meet high, sustained demand.
Of course, as in all fields, the hardest jobs for businesses to fill are those that require specialised skills. However, finding the right person with the requisite in-depth tax expertise is nothing less than a minefield, particularly when the majority of graduates who decide on a career in accountancy continue to tread the more familiar routes of auditing and consultancy.
Those electing to train as a tax specialist, helping companies to ensure they are paying the right amount and remaining compliant amid an increasingly complex legislative framework, are therefore increasingly a prized asset. It’s never been more important to maintain watertight financial disclosures.
Indeed, tightened tax legislation is a big factor in the rising demand. It’s changing constantly – we now have both UK and Scottish taxes to contend with – mainly on the back of political pressure and the Inland Revenue becoming ever more focused on anti-avoidance. The result is that individuals and companies need to turn more regularly to their advisors for assistance.
There has been a particular spike in demand for tax advisors in recent months as partnerships look to restructure in advance of PCR Registration disclosures.
Worse, for those organisations doing business across borders, the international tax system is changing rapidly as a result of coordinated actions by governments and of unilateral measures designed by individual countries, both intended to tackle concerns over Base Erosion and Profit Shifting (BEPS) and the perceived international tax avoidance techniques of high-profile multinationals.
From a recruitment point of view, we’ve seen many of our own larger corporate clients – including banks and asset managers with international interests – suddenly having to deal with the impact of BEPS, and struggling to meet its challenges head on.
Likewise, high-profile corporate entities are increasingly sensitive to the potential for reputational risk, especially following public condemnation over the tax systems employed by the likes of Starbucks and Amazon.
Indeed, Chancellor George Osborne faced stinging criticism earlier this year for striking a £130m backdated tax deal with Google when it owed much more – Labour claimed as little as three per cent was clawed back – while Prime Minister David Cameron has seen his own tax returns investigated of late following allegations over just how much he had benefitted from his late father’s offshore investment fund.
Financial institutions are even more on the alert following all the ethics scandals associated with that sector and its many tarnished reputations. The last eight years have seen significant changes on how both chartered accountancy firms and companies in general deal with tax compliance and reporting with a view to minimising costs.
Furthermore, we’re now seeing banks starting to lend; more cash is available and we are seeing more deals being done, so investors and entrepreneurs are seeking advice from tax advisors on how to best structure deals and take advantage of tax breaks in areas such as R&D and Patent Box. Therefore, good, dependable advice has become a prized asset.
Compounding the tax talent drought, issues remain with the supply of skilled professionals, caused partly by companies continuing to cut back on graduate intake following the economic downturn. With confidence still not fully restored and uncertainty remaining prevalent, we simply do not have enough tax professionals qualifying to meet market demand.
Unfortunately, businesses remain wary of over-resourcing at graduate level and therefore are opting to go to market only when they need experienced hire professionals. However, they are then finding that they cannot get what they need without paying over the odds.
Price therefore is climbing year-on-year for qualified tax professionals between the stages of being newly qualified and seven years’ post qualified.
With demand for tax services increasing and more jobs being created at qualified level and above within industry and commerce, businesses have to start looking beyond the immediate and focusing on how they will bring through their own talent for a sustained solution.
So what can businesses do when specialised tax positions are difficult to fill? They can encourage referrals from existing employees, offering ‘finder’s fee’ bonuses to those that bring in skilled new colleagues. They can obviously also consult with a recruitment expert in the field.
Another way to compete is to encourage tax specialists to stay when you find them. Create a dynamic and supportive workplace, and continually monitor your retention strategy.
Essentially, only by singling out this ongoing problem for dedicated action and taking careful preparatory steps can it be meaningfully solved. Without that, companies will continue to pay the price of not being able to count on having top tax advice at their fingertips for peace of mind in an increasingly challenging business environment.