Home Old Breaking News The upside of tax scandals: jobs, more work and new opportunity

The upside of tax scandals: jobs, more work and new opportunity

by LLB Editor
9th May 13 9:39 am

“Tax evasion” and “avoidance” have become the buzzwords of bars, boardrooms and bristling MPs… the consequences for the tax industry are intriguing

A few years ago you would have found it hard to imagine a time when all anybody could talk about was tax. Perhaps you might find it plausible in an office full of self-employed architects just before the self-assessment deadline at the end of January. Not all over Twitter, at the bus stop, on all of the front pages and in the loos at Hix. But 2012 seemed to be the year of the tax scandal and tax has had everybody in debate since.

From Starbucks to Jimmy Carr, a lot of famous names hit the headlines. There have been numerous public inquiries and court hearings. The publicity has put tax in the spotlight for many companies, making the tax professional a very valuable commodity. At a time when jobs cuts are rife in the City, a renewed interest in tax has given a boost to recruitment in the industry.

“Tax avoidance issues in the media have raised the profile of tax in the country, therefore there has been more pressure on compliance and reporting, putting tax at the top of a lot of individuals’ and companies’ agendas,” says Zoe Morris, director, Hays, the recruiting expert.

“This has seen a positive increase in personal and corporate tax professionals from junior to mid-level roles, and firms feel they can now replace leavers rather than cover internally.”

Much like the financial industry, where regulatory changes have meant a great demand for financial compliance skills, increased regulation from our government and others has meant a need for skills in those areas.

“Project work has increased because of the Foreign Account Tax Compliance Act (FATCA), a legislation from the States which intends to improve tax compliance involving foreign financial assets and offshore accounts,” says Morris. “This has increased the need for non-doms to look into their tax affairs.”

It’s good to see a buoyant outlook for the recruiting side of the industry. The attention being garnered by big corporates accused of not paying fair taxes in this country has annoyed a lot of tax professionals, many of whom believe the debate has become ridiculous and could have a lasting effect on the public opinion of tax in the UK.

“It terms of individuals, where tax evasion is happening the increased focus is excellent – these people should be brought to task. But the debate has become skewed,” says Miles Dean of Milestone International Tax Payers.

“All of the nonsense about morality is rubbish and the comments from Margaret Hodge are damaging. The UK’s reputation as a solid sensible jurisdiction where the rule of the law is applied is at real risk from this debate, in which companies like Starbucks are having to agree to pay tax they don’t even owe.”

While a few of the outcomes of the investigations into corporate tax-paying may seem ridiculous to some, the whole affair has drawn attention to flaws in a system which nonetheless needs looking at. The introduction of the General Anti Abuse Rule (GARR) has been welcomed by some in the industry, as it attempts to end any confusion around what is allowed and what is not. This in turn will create further jobs within the industry, as companies and firms grapple with the added legislation.

“The amount of work has increased because of the increased levels of enquiry,” says Mike Kerridge, a tax expert of Charter Financial.

“In relation to Employee Benefit Trusts and the like it is reported that there are about 60,000 cases outstanding – and the numbers are increasing daily. HMRC have targeted all providers of arrangements and so on, and have taken test cases for each provider.

“The industry is certainly buoyant as the legislation is becoming even more complex and requires more people to have an understanding of it; take for example the proposed new law regarding anti avoidance, GAAR.”

The signs from the recruitment side of the industry are certainly looking positive. Succession planning in the professional and financial services has all but gone out the window, as they try and cut costs in the short-term; but this hasn’t been the case for many involved in tax and audit.

“Succession planning is key to the future, so many firms in this area are starting to form strategies to manage this, with some offering quick progression to partnership,” observes Morris.

There’s no denying that the tax industry has had a tough year in terms of added scrutiny, and it now faces a great deal of changes which will require hard to work to keep on top of. However, the outlook for the industry remains very good with firms looking to recruit new hires at a range of levels. And when it comes to the bad publicity, some would argue that it will only affect a small minority within the industry anyway.

“The recent tax scandals and subsequent adverse publicity haven’t had any great impact on the tax industry as a whole,” argues Chas Roy-Chowdhury, Head of Taxation at the Association of Chartered Certified Accountants.

“In the UK, the majority of tax work is conducted by accountants, and those who engage in aggressive tax planning account for around 0.1% of the entire industry. In fact, many involved in that end of the tax market are probably not members of the accountancy profession.

“The sensationalist news reports and intense scrutiny from politicians has been focussed on this tiny segment, meaning that the majority are unaffected. Most accountancy firms recruit on an annual basis and intake remains as buoyant as ever. We expect to see similar levels of new recruits as in the previous year.”

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