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How active is the direct tax jobs market as we approach the halfway point of 2021?
Senior Consultant Ed Moore presents his latest market report…
Although it’s news from Q1, tax specialists are still dealing with the aftermath of March’s budget. With new corporate tax rates being introduced from 2023 (19% – 25%), it’s very likely that many clients will be seeking expert advice on their tax strategy over the coming years. This especially applies to businesses that surpass the £250K profit threshold. As the biggest corporate tax rate hike since 1974, it represents a huge shift in the tax landscape.
With businesses requiring polished tax processes, we could certainly see an increase in use of third party tax service providers, resulting in more vacancies and profits at tax practices.
International tax advisors will see ample changes to global tax legislations changes over the coming months/years, especially if the efforts of the OECD are successful and global minimum tax rates are accepted.
There will always be a need for national tax experts, but having a global scope of tax knowledge will certainly benefit your career. Interestingly, there has been an increase in international tax specialists in the GCC region and a prediction that this could rise in the next 1-2 years (UAE & Bahrain being hubs for this growth).
The heightened demand in tax recruitment often follows the growth of industry sectors. The pandemic, for all its negative effects, has triggered the rise in certain industries. So far in 2021, some of the fastest growing industries have been e-commerce, sports equipment, online media, gaming, and specialist goods such as safety equipment and supplies. Financial services is always busy and this hasn’t changed.
Those firms that have dedicated tax teams for these sectors have seen similar growth. One observation has been that Managers and Senior Managers in the media and entertainment sectors are sought after, as are specialists in the e-commerce and financial services sectors.
UK&I Recruitment Highlights
Associate to Assistant Manager: Recruitment at these levels took the biggest hit back in March 2020 and it has taken time to bounce back. The top 10 firms have spearheaded the return of recruitment for these candidates, with around 60% of roles focussed on corporate tax and international tax, and 25% on personal tax & global mobility. Tax tech & employment taxes made up the rest. Newly qualified candidates are still highly sought after.
Manager: Competition for manager-level candidates has been fierce. With the majority of job advertisements coming in at this level, the active talent pool cannot accommodate it. The firms that stand out from the crowd are in a prime position to attract the great candidates out there.
From experience, firms that offer less flexibility and have less interesting client bases are losing out. It’s a brilliant market if you’re a corporate tax compliance specialist and not looking for an advisory position.
There have been two standout industries at this grade, the first being financial services. Compliance specialists are in high demand, particularly in the Big 4. If you have experience with complex compliance or advising on compliance, then it’s a candidate driven market.
The second area of demand is from general markets. Not so specialised, but firms outside of the Big 4 are seeking tax managers who have covered several sectors, which is often how many tax teams operate. With private client tax, trusts experience is highly sought after.
Senior Manager / Director: After speaking with professionals at this level, the key challenge they have faced has been recruitment at junior levels. Workload is at an all time high for many tax teams, which certainly affects SM’s & Directors, as they’re there to lead strategy and manage client portfolios. However, the ability to take on more work is directly hampered by the support at lower levels.
The recruitment market at this grade is much more reactive than proactive (in all areas of tax). It’s a great position to be in as most firms (depending on the size of firm you’ve worked for) will always be interested in what you have to offer.
There often doesn’t need to be a role advertised for you to gain interviews. One way to stand out is to gain as much high quality advisory work as possible. Some firms avoid risk, but if it’s well-informed advice that offers a client several options, then your level of service will stand out.
Partner: The challenges never subside on a Tax Partners desk, the latest of which stems from the UK budget. Tax planning has always been an integral part of the role of an advisor, but with multinational companies needing to adapt to changing tax rates, it’s the perfect opportunity for Partners to show their level of service.
Roles at this level aren’t advertised as frequently as other levels and one reason for this is discretion. If it’s a replacement, it could well be that it’s news that a firm doesn’t want to go immediately public. A tax practice will always want to know about any Partners on the market as there’s obvious benefits to the revenue they can bring in.
Questions from potential hirers include: what size portfolio can they bring with them and do they have a team of tax professionals that would make the move with them?
From listening to candidates and clients at this level, to attract top talent, a recruiting firm would need to commit to significant investment into the tax teams, notably in technology and recruitment budgets.
DACH / BENELUX
Europe’s tax landscape is as complicated as ever. Tax planning is a key part of a practice tax professional’s role, but beware the EU’s crackdown on aggressive tax planning’. It’s no revelation that companies and individuals alike want to be as tax efficient as possible, but with tax avoidance / fraud resulting in the loss of billions of Euros every year, it’s not a surprise that the European Parliament is as stringent as possible.
The impact of this on tax professionals is significant. Any reputable firm will provide a service in line with up to date tax legislation. The challenge here is keeping up to date with these changes and understanding the impact it has on clients.
Climate change is always a “hot” topic and tax plays its part. An International Tax Review survey of tax professionals found that most believe environmental taxes will be increased. This affects some industries more than others. Energy producers, producers of goods (particularly meat), and transportation businesses will be impacted more so than other industries.
With significant changes in the pipeline, it’s only natural that there will need to be added responsibilities given to tax teams around the world. Tax efficiency is of key importance for multinationals, so a technically strong tax professional will play a key role in business tax planning.
Recruitment throughout Europe has seen strong growth over the past few months, but the challenge has been the restrictions on movement across borders. With COVID restrictions and candidates lacking the appetite to move during a pandemic, the pool of talent has been reduced.
It’s hard to see a decrease in recruitment going forward. Accountancy firms and law firms are making the most of their client base growth and profits by bolstering their tax teams, but the doubt is whether the candidate market can keep up.
With new legislation being introduced, such as the digital levy, it’s only natural that tax tech professionals will be highly sought after. If the world gets to a point where we learn to sustainably live with COVID, then cross-border recruitment will see a significant rise.
The firms and businesses that will attract the best candidates in this market are those that offer flexibility. With the majority of candidates choosing a flexible working week, those employers who embrace the new way of working will thrive in this candidate driven market.
What does the future hold for tax recruitment?
I believe that the demand for TMT tax specialists will continue throughout the coming years, and competition for experienced candidates will continue until junior professionals start coming up through the ranks (a by-product of the hiring freeze and decrease in entry-level recruitment).
If the world starts to open up with less restrictions, sectors such as retail, hospitality and aviation could make a resurgence, meaning a mirrored effect with tax candidates in these sectors. These sectors certainly need a boost after very difficult times.
Ed Moore is a Senior Consultant in the Tax Division at Harvey John.
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Ed knows and appreciates the complexity of direct tax and works closely with clients and candidates alike to ensure all requirements are met.
Speak to Ed for positions & candidates that specialise in:
- Corporate Tax (domestic & international)
- Transactions & M&A
- Private Client Tax
- Employment Tax
- Withholding Tax
- Tax Investigations
- R&D Tax