Though you probably won’t help imprison gangsters like Al Capone for income tax evasion, as a tax expert you’ll certainly hunt down creative solutions to surprising problems. Here’s a look at the tax careers out there and what you’d do in a day at the office.
Imagine your life as a tax advisor
Tax at a glance
Tax is an unavoidable fact of life – it affects every person, company and organisation. Everyone wants to save money on their tax bill. Everybody wishes someone would do the paperwork for them.
Time for the tax professionals to step in…
People employ tax firms to:
- know tax law
- find creative ways to save money
- do all the calculations
- do the paperwork
- …and explain what they’re doing in simple terms
What roles are there in tax?
A tax role has two main parts: compliance and consultancy.
Compliance is the nitty gritty of tax – the paperwork. One key compliance job is to complete your client’s tax return according to the current regulations and file it on time. Depending on your specialism, you might do calculations, accounting and paperwork for things like setting up family trusts or estate planning. At the beginning of your career you can expect to focus on compliance while you learn the ropes.
Tax consultancy is the problem-solving side of the tax business. Tax advisors make sure their clients’ finances are tax-efficient (simply put, they find ways for their clients to pay the minimum tax possible). It means knowing tax regulations inside out and being able to take advantage of all the available tax structures, tax breaks and loopholes. This is what you’ll focus on as a qualified tax advisor.
There are three main tax areas:
- Corporate tax – managing tax for companies or corporations. There are specialisms within this, such as transfer pricing.
- Personal tax – managing tax for individuals. Specialisms include estate planning and high net worth individuals.
- Indirect tax – managing tax on goods and services, such as VAT on products. This is different from tax on personal income or company profits.
Your day-to-day work
On an average day at the office, you might do some of these things:
- Work on or check over a tax return for a client
- Review a change in tax legislation and report back to your colleagues
- Collate information on a client’s tax position to prepare for a meeting
- Correspond with HMRC to sort out any queries about a client’s taxes
- Meet with a client to explain their options for tax efficiency
- Explain to a high net worth individual how their country of residence will affect their tax
- Calculate your client’s potential taxes to work out which financial arrangement is most tax-efficient
- Set up a family trust or plan the best way for someone to leave their estate when they die
In principle, tax is a nine-to-five job but you will need to work hard.
In your first few years you’ll work towards qualifications as well as doing your job. You’ll do most of it in your own time.
Tax has very busy periods, particularly in January when tax returns are due. You can expect to work some evenings and weekends.
What types of firm can you work for?
These firms usually offer their clients full accountancy services, including audit, risk management and corporate finance. They range from medium to large. The largest are the Big Four (Deloitte, EY, KPMG and PwC) which also offer a range of consultancy services.
Tax advice firms
Often boutique and specialist, these focus on tax. They may cater to companies or individuals.
Some companies have in-house tax professionals to handle their own taxes. Depending on the company’s size, the tax department could be one person, twenty or hundreds.
Skills and qualifications
While numeracy is important, tax companies aren’t looking for mathematicians. They want people who can interpret complex legislation and explain clients’ options in plain English.
You need to excel at:
- time management
- commercial awareness
- attention to detail
During your first years in tax you’ll work towards the qualifications you need for your role. Once you have two years of experience in tax you can take the ATT (Association of Taxation Technicians) exam to qualify as a tax technician. You can follow this with the CTA exam to become a Chartered Tax Adviser.
Getting a foot in the door
A visit to one of the Big Four accountancy firms is a good first step towards your tax career – even if you don’t plan to work somewhere like that. Try to win yourself a place on one of their introductory programmes. You’ll need to apply in the first term of your first year at university.
A summer internship will also get you off to a great start. Again, check out the Big Four and look at smaller tax firms to see what they have to offer.
As a graduate trainee in tax, you’ll earn around £25,000 to £35,000. You can expect a pay rise of about £10,000 when you qualify as a CTA.
Tax has a clear career progression and your salary should rise steadily. After five years you might be earning £50,000 and after ten years it could be £100,000. Partners in the Big Four can earn over £1 million.
What to do afterwards
A tax career can give you the business experience to move into business consultancy roles. It can be quite hard to move sideways into a related accountancy role – you may have to re-qualify or take a significant pay cut.
Once you’ve built up some experience, there are ways that you can take your accountancy career elsewhere.
You could move into a civil service role which can offer a good work-life balance and benefits. Or you could strike out on your own. As a freelance tax professional you’re likely to handle personal taxes or those of smaller companies. You can set your own hours and work from home.
To sum up…
- Tax is a career where communication skills are even more valuable than numeracy.
- Day to day, you’ll navigate tax law to find creative ways to boost your clients’ tax efficiency. You’ll explain complex regulations in simple terms. There will also be paperwork and calculations where you’ll need to be meticulous.
- The salary is competitive and the job security is high – after all, there will always be taxes.