• 05 August 2019
  • Tax

The importance of harnessing tax technology when it comes to progressing your tax career

I’m certainly not the first person to write about the importance of understanding tax technology and I certainly won’t be the last! But after numerous recent visits to industry conventions and seminars, alongside what we see in the market everyday, it seems that this topic still needs to be discussed more than it already is, particularly when it comes to recruitment.

Naturally, as Tax Technology recruiters, we engage with an eclectic mix of tech professionals and we’re in a fortunate position of being able to see the winners and losers of the market. For example, we’re still surprised when we see how many junior tax candidates are held back from getting any exposure to tax technology in their training. For many firms, training programmes haven’t evolved, as with the current tax qualifications. The Big 4 do very well here but, of course, this is often dependent on what department you work in. For many of the compliance firms, filing VAT returns through different VAT software systems will be an everyday occurrence, which gives tax compliance professionals a strong platform to further the tech-savviness. But does this equate to rich, in-depth tax technology experience? And what is ‘rich, in-depth tax technology experience’ in today’s pool of candidates?

The digitalisation of tax in the global market

There’s simply no way of avoiding the digitalisation of tax in Europe. It’s everywhere we turn and even our LinkedIn newsfeeds are littered with new emerging tax tools that are coming onto the market. And at home in the UK, with the soft launch of Making Tax Digital (MTD) in April 2019, industries big and small are in a stage of preparation and implementation, which has forced many in-house tax teams to take notice!

The UK isn’t the first jurisdiction to introduce tax digitalisation, with many other countries leading the way. The ICAEW released several case studies in this 2019 whitepaper, detailing the conception, history, and challenges faced with ever-evolving tax system proficiencies. For instance, one of Italy’s biggest issues with online tax filing is that internet speeds and PC ownership are well below the European average, creating the need for expensive external tax compliance providers. Comparatively, a key issue for the UK is that MTD will require many non-incorporated businesses to report quarterly VAT returns. This would certainly induce substantial software and training costs, alongside the inevitable cost of time. External accountancy and professional service costs can make a significant difference to a business that’s just over the £85,000 threshold requirement, equally, so is bringing on a full-time employee to cover these obligations. Catch 22! 

With national tax regimes investing in digitalisation, businesses and tax professionals alike now need to invest in how they approach, understand, and nurture the demands of this radical change to the tax landscape. 

How important is it for the tax professional of today to have tax technology exposure?

Jay Nibble, EY Global Vice Chair Tax, said ‘while technology will continue to disrupt the tax world, it also offers a promise of great solutions’*. A staunch warning perhaps but also, what many would consider, an inevitable truth. With senior tax figures stating that there have been more changes to tax in the last 5 years than in the last 50, it can only mean one thing: the tax professional of today must adapt.

In our Indirect Tax & Tax Technology newsletter, we run a Poll of the Month. Recently, we put a question out to our network that asked: “Does your business / team plan to appoint a tax technology professional in the future?” Believe it or not, out of 183 responses, here were the results:

Poll of the Month

From a recruitment perspective, we’ve worked with clients across the spectrum:

  1. Those that adapt

  2. Those that bury their heads in the sand

  3. Those that want to adapt but can’t get sign off

The issues faced within the industry have ranged from Heads of Tax not having the support from above, to some failing to embrace the changing face of tax compliance. On the contrary, we’ve worked with numerous clients who are ahead of the curve. We’re not here to tell you to buy some sort of tax tool, we’re here to tell you how tax technology needs to be factored into your recruitment plans if you’re a tax team, or your career plans if you’re a tax professional. 

What prospect does a career in tax technology offer?? 

In professional services, tax software houses, and the interim market, the demand for tax professionals with broader tech experience has been huge. Whether that’s been for a Taxologist (in the true sense of the word) or a tax technologist… Either way, around 70% of the positions we’ve recruited for in 2019 have asked for some form of technology exposure. 

With more and more companies updating systems and improving overall processes for tax compliance, this can only result in systems exposure becoming the norm for all tax professionals, from graduate-level upwards. 

Given how quickly the market has changed, it might be difficult to appreciate how far you can progress your career in tax technology and what avenues you can take. The hot topic now are  ‘solutions’-based roles, which are generally required by tax software houses that have a product to sell. Although not a ‘hard sales’ role, it’s often termed as ‘pre-sales’ because of its involvement in the sales cycle. Essentially, this is the sort of position where you must be a technical expert on whichever software system you’re showcasing to provide a solution to the client’s needs.  

Here are some other types of technology roles that we recruit for:

  • Process & technology
  • Tax transformation
  • Pre-sales, solutions, and sales engineering
  • Systems implementation
  • Tax research & content
  • Product leads
  • Tax process owners
  • Systems engineers
  • Data analytics consultants

Most mid to top tier accounting firms will have divisions of tax technologists, as well as positions that involve elements of it without sole responsibility.  There’s also the engineering side, where you may see IT professionals move the opposite direction and become tax-savvy. Or there are implementation roles, which have a strong ERP focus and can be frequently found in the interim market. 

Ultimately, where there are tax jobs, there are tax technology jobs and, if anything, the more specialised you are, the more you increase your market value.

Conclusion 

The inevitable truth is that, whether we like it or not, tax technology is here now. And in the bigger picture, it’s very much in its infancy! With everyday life becoming digitalized and automated, tax is no different. Today’s tax accountant, lawyer, or advisor must adapt. Sure, there are certainly tax roles that won’t require you to be operating at the IT heavy end of the spectrum but, with such a prominent part to play in the tax sector, it’s important that one at least ensures they have a grasp of the growing world of tax technology and then continue to build upon this.

The result of gaining such experience is a job description that’s more interesting than most, salaries that are at the top end of the scale, and not becoming extinct! 

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*https://taxinsights.ey.com/system-admin/editions/tax14-technology-abo-version-lowres-151020.pdf

 

Ed Moore is a Senior Consultant in the Tax Division at Harvey John.

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