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About In House Tax

About In House Tax

This weblog is a news and views site for tax professionals within the UK and international in-house tax community.  You will find information about appointments and people moves in and around the in-house tax market, issues affecting the in-house tax professional, opinions on the state of the tax job market, updates on tax technology, and other general thoughts of the day.

Hope you find it useful.

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Location: St Albans, United Kingdom

This site has been developed by Simon Godley, who also runs the niche tax recruitment company Talentpool Selection . Simon spends a lot of his time placing tax specialists into FTSE companies, large in-bound groups and some professional services organisations. He also recruits and is well networked around the UK tax technology and VAT markets.

Tax News

Tax Technology - the future of tax, or just a phase?

Tuesday, 31 August 2010

By Simon Godley

I recall when I first moved into recruitment in 1996, the level of IT used in the job was immensely low. In an office of 20 recruiters, we had one PC in the corner of the room for if anyone wished to log-on to the internet. No-one was very much interested, and that PC didn’t actually get used very much. How things have changed.

Concurrent to this, when I moved out of practicing tax in 1996 from a London Big six firm, tax preparation software was by then quite well established, albeit a modified Excel spreadsheet in colour, and one could print out a list of tax claims & elections that had been generated by a client database, but that was about it in the way of technology. At this time, the idea of launching a full career into tax software seemed a little wacky, and only taken up by a tiny fraction of ‘computer guys’. Again, how things have changed.

Almost 15 years on, the current UK tax technology market is now made up of a wide array of businesses – specialist departments within the Big Four tax practices, specialist independent software businesses, sub-divisions of broader business / finance software companies, consultancies that advise clients on employing tax technology, and specialist Tax-IT implementations firms. There exists tax software for every tax – personal tax, corporate tax, VAT and indirect tax, expatriate tax, property taxes, CGT and transfer pricing. The tax technology market splits roughly into three segments – software developers (designing and marketing the software), consulting firms (providing tax-IT advice on best practice and relative merits of tax compliance systems) and implementations (installing and rolling-out software within companies for end-users).

So what types of roles are out there, and what do these specialists do? Again, there’s quite an array of options. You could operate at the development end, which is essentially translating tax legislation into spreadsheets, and changing the software when we have a new Finance Act, for example. This requires a very analytical person, who can understand tax legislation, but also with a passion for playing around with Excel. You could be a consultant advising large multinationals on the use of indirect tax software, such as Vertex or Sabrix, which basically extracts all relevant data from a company’s accounting system, does some clever calculations and then drops the appropriate numbers into individual country VAT returns. This is generically known as VAT Automation. Or you could be an implementations specialist, someone who, for example, might enhance a SAP accounting system to generate the correct tax numbers, or may configure a SAP system to work in conjunction with tax preparation software, such as Abacus or Alphatax. This type of work is typically done at the client location, and so often flexibility to travel is required.

Make no mistake, these are very specialist roles, but may appeal to a broader corporate tax or VAT Accountant looking to sub-specialise. So what type of knowledge and skills are required for a tax person to make the transition? Firstly, the tax technology market will tend to be more suitable for a qualified tax professional operating within the tax compliance or tax accounting arena, either based in practice or in-house. You will be close to current methodologies used for tax compliance and tax accounting, and as a minimum will be end-users of current tax software products. Secondly, you will without doubt have a genuine interest in IT and computing – you will enjoy playing around with Excel, you may have done the computing ‘A’ level which teaches basic programming, and you will generally have a high level interest in technology. With these two experience traits, you would be well advised to at least consider a move into tax technology. In addition, interpersonal and client handling skills will also play an important part, depending on which segment of the tax technology market, as above, you have entered.

So what does the future look like for the UK tax technology market? I think it still looks like a strong growth area. The US market is much more mature in terms of the level of tax technology used by the corporate market, and as technology has a habit of doing, more products and services are now flowing into the UK & European market. There have also been some recent UK legislative changes, basically giving strict guidelines as to how companies have to produce and submit their tax returns (iXBRL), and that some companies of a certain size need attest to the level of accuracy of their tax compliance process (Senior Accounting Officer). This has naturally focused the minds of heads of tax and FDs, and forced them to consider the options in the market for enhancing their tax compliance process, through the use of tax software products and tax process.

Over the last couple of years, we have been in an economic environment which has made it very difficult for companies to justify the cost and raise the budgets for tax technology spend. However, as the economy improves and business confidence returns, I suspect that many companies will find the budget to employ clever uses of tax technology, and the market could grow rapidly from that.

I do think that tax technology is going through a phase, and it is a very interesting phase, which indeed could change the future of how tax is done within the next 5-10 years. This in turn will generate more opportunities to make a very successful career within tax systems & technology.

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posted by Simon Godley

Tax Directors - Influence in the Boardroom

Wednesday, 11 August 2010

Source: Tax Director Network

This is one of the conclusions from Winmark’s third benchmarking survey of in-house Tax Directors. The headline results were announced on Tuesday 27th August at a reception sponsored by the Chartered Institute of Taxation (CIOT).

Out of over 100 respondents to the Tax Director Network survey, the vast majority of Tax Directors believe that their FD/CFO values the tax department and sees it as a key contributor to the success of the overall business. However, less than half of Tax Directors are confident that this opinion is shared by their UK Board, the rest of the UK business or an Overseas Board (where relevant).

According to Mark Lee, head of the Tax Director Network which arranged the survey, this is a surprising result. “Perhaps Tax Directors are being needlessly modest”.

In last year’s survey 70% of Tax Directors rated increasing the visibility of their Tax Department to senior management as ‘very important’. Two thirds of Tax Directors now feel that they have some degree of influence, relative to others who have a say in the management of the organisation. However only around 1 in 10 Tax Directors believe that they have “a great deal of influence”. Mark thinks this could be down to visibility again. “Responses to our survey suggest that most Tax Directors seem to have a surprisingly low level of engagement with senior management, other than their local FD/CFO”.

Those Tax Directors with a great deal of influence tend to be those who engage more. “Of course there is a catch-22 here”, admits Mark, “some really strong Tax Directors work closely with their CRM in HMRC and, may be able to ensure that there are no undue surprises such that there is little need to engage with senior management other than their FD/CFO. The risk profile of the organisation and its range of activities mean this is not always possible of course.”

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posted by Simon Godley

Tax Directors say iXBRL will drive takeup of corporate tax software

Monday, 9 August 2010

Over 60% of Tax Directors anticipate making greater use of corporate tax software due to new iXBRL obligations

This is one of the conclusions from Winmark’s third benchmarking survey of in-house Tax Directors. The headline results were announced on 27th July evening at a reception sponsored by the Chartered Institute of Taxation (CIOT).

Out of over 100 respondents to the Tax Director Network survey, 15% said that they do not use corporate tax software and a further 12% said they use such software only to a very limited degree. When asked whether they anticipate that their departments will make greater use of corporate tax software in the coming year, 60% said “yes, due to the new iXBRL efiling obligations”.

According to Mark Lee, head of the Tax Director Network which arranged the survey, the move to iXBRL is fueling greater interest in the benefits of corporate tax software. “A surprising number of organisations still seem to rely on spreadsheets although this may be due to perceived constraints in the available software. The requirement for consistent iXBRL tagging will mean that more organisations will be using corporate tax software by this time next year.”

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posted by Simon Godley

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