The compliance season and plans for Brexit were the major influences on the tax market in Q3 of 2018.
Private client tax recruitment is heading towards ‘down time’ with the busy compliance season fast approaching. Regardless of this, clients are still eager to see quality CVs. One notable shift has been the increased desire to house a compliance specialist within advisory teams, particularly in the Big 4. Only a few years ago, compliance was outsourced to compliance centres - the recent shift suggests that model wasn’t as successful as initially hoped. Requirement to Correct and CCO have increased scrutiny on compliance, highlighting errors that were not picked up on previously.
The number of general commerce in-house tax vacancies remained strong in Q3. VAT continues to be in particular demand - a probable influence of Brexit preparations and the presumed changes that will impact indirect taxes. ‘Making Tax Digital’ seems to have effected investment in tax technology and triggered a general drive towards process standardisation.
The main focus of contract/interim hiring has been on Governance measures in tax teams (Reporting, Compliance and Senior Accounting Officers) and planning for Brexit. US tax reform continues to impact multinationals and has sparked conversation around how countries, predominantly the UK, will respond to the reform and whether it means new policies will be introduced to maintain competitiveness. We expect that in-house and practice teams will hire those with Business Tax Advisory skills to maintain and implement these changing policies. Indirect Tax contracts have also seen huge growth; this is due to the reassessing of Indirect Functions to meet the needs of the increasing profile of VAT.
More senior hires are required across private client tax to help drive business, but also organisations are increasing efforts on the development of junior staff. Experienced managers, senior managers, directors and even partners are lacking, which could prove to be a real issue for succession planning in the next 5-10 years. With job flow high, now is a good time for professionals to explore options.
For general commerce permanent hiring, tax technology exposure and VAT have frequently been in demand. From a corporate tax perspective, there has been more on the compliance side than technical/advisory. Recently, the majority of demand has been at manager level.
Introduction of new tax disciplines has changed the DNA of tax professionals and as a result, traditional hiring needs have also changed direction. Tax technology is definitely an area of development for in-house tax, however, due to a shortage of competencies, this work tends to be tendered exclusively by the Big 4/Practice firms.
Numbers of private client professionals available are tighter now than they have been for a long time. This could be down to various factors including; time of year, seniority of candidates required and disparity in salaries. Where candidates have looked to move roles, counter offers have been aggressive, skewing the market and ultimately making candidates decide between professional development and money.
The buoyant general commerce market has generated some really strong candidates, but they haven’t been available for long - multiple offers have been common and the increased demand has also resulted in salaries being driven up.
On the interim side of tax, the candidate pool is fairly divided. Businesses have been re-evaluating their corporate structures due to increased pressure around cost bases, with Heads of Tax having to largely rely on shared service centres or fully outsource areas to service providers and accountancy firms. This has meant more immediately available candidates, particularly at the senior end, from redundancies. Newly Qualified candidates remained in high demand but were in extremely short supply - this has caused a spike in salaries at tax accountant level, showing a 17-22% increase in average daily rates and salaries.
Within the private client market, unsurprisingly, partner mandates are consistently the highest paid roles. However recently, an in-house role within a private equity firm based in central London was offering a salary equal to that of an experienced director or junior partner.
Higher demand has resulted in recently qualified candidates in general commerce tax being paid close to what we would previously have expected for managers - this has impacted wider salary expectations.
Top temporary roles:
The main contributor to a successful end of the year will be whether candidates are eager to look at their options. Where the private client market is concerned, given the time of year, it is unlikely they will be considering moves, but with bonus announcements and reviews coming for some professional firms, there could be some activity.
A competitive in-house tax market means employers have to move quickly and have swift interview processes if they want to hire the candidates they like. Be mindful of notice periods and annual headcount restrictions - now is the time to recruit if you’re keen to have someone start in the new year.
Key hiring themes emerging are indirect tax, business tax advisory support staff and reporting skills to meet the increased demand in governance and controls. The appetite to hire despite Brexit uncertainties will be the main contributor to success - most action around Brexit has been planning, but regardless of how apprehensive they are, clients will have to start committing to a direction.
Contributors to the Q3 Tax update: