square peg
  • Publish Date: Posted 26 days ago
  • Author:by Kirsteen Brannigan-Hughes

Square pegs, round holes…and the need for genuine tax expertise in your business

As you know, the government has an Office for Tax Simplification, set up by George Osborne after he became Chancellor of the Exchequer in 2010. Unfortunately, as a former tax director from Grant Thornton who worked for the OTS has recently noted, “It does, however, suffer from the fundamental problem that every time a simplification measure is accepted by the government it is overwhelmed by a much greater volume of new legislation.”He goes on to liken it “to trying to walk up a down-moving escalator.”Contrary to what the old, award-winning HMRC adverts used to tell us, tax is taxing – and that’s why you need specialists to deal with it.That’s why there is a separate, specialist qualification for tax professionals – the CTA – that takes them beyond the level of the average CA, CIMA or other accountancy qualification. Yet too many companies delegate this vital area to someone who, while not unaware of the details, too often lacks the in-depth knowledge and experience that is required in today’s increasingly complex, tax environment. It is a classic case of square pegs in round holes.Alternatively, they hire external advisers whose knowledge of the firm is only surface deep. In other words, because they don’t know what you don’t know, these advisers will only answer the questions you give them, with all the potential for error that implies. As a result, it’s questionable whether many firms which go down this route actually get value for money – and in my experience they sometimes get poor advice in key areas, which consequently brings the issue to the attention of HMRC. As we all know, the last thing any firm’s CEO and CFO wants is an HMRC investigation…As a result, tax is rising up the agenda for CFOs and CEOs. However, unless a company is big enough to employ a genuine tax expert (most aren’t), many firms are cutting corners and getting either external consultants or their accountants – all decent, talented people no doubt – to deal with tax matters, despite the rising threat of reputational risk if errors occur and become a matter of public record.The challenge for the tax professional working inside a business is how to apply their skills equally to ensuring their employer reaps the rewards of tax optimisation whilst also taking the necessary steps to avoid the potential costs of getting it all going horribly wrong. Every business is different, but there are a number of common goals and objectives, including, but not limited to:·        Reducing risk – Transfer pricing, robust internal systems and controls·        Significantly reducing professional services fees/getting value for money in these fees·        Business partnering/optimising the tax position·        Enhancing processes and systems to ensure infrastructure is in place for growth/sale·        Providing assurance and improving relationship and risk rating with HMRC·        Proactively making plans for changes in tax legislation, such as IR35, digital tax, Brexit impact on customs, furlough/WFH tax exposures and, of course, MTD.Given Cedar’s well-established track-record in accountancy and finance, these are the kind of issues that my colleagues are increasingly hearing about from our clients and it’s no surprise that we have seen a trend towards more and more businesses making a tax expert a key hire. Which is where I come in…I’ve joined Cedar as the Head of our new Tax Division, bringing over 15 years’ experience of recruiting exclusively within the in-house tax market. In that time, I’ve built up one of the very best networks in this area and worked across all sectors, placing permanent and interim candidates across corporate tax, indirect tax, transfer pricing, and human capital, from Head of Tax/Tax Director level to Tax Manager. I’m looking forward to meeting both new and existing clients to discuss how we can help them avoid continuing to fill those round holes with square pegs!

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As you know, the government has an Office for Tax Simplification, set up by George Osborne after he became Chancellor of the Exchequer in 2010. Unfortunately, as a former tax director from Grant Thornton who worked for the OTS has recently noted, “It does, however, suffer from the fundamental problem that every time a simplification measure is accepted by the government it is overwhelmed by a much greater volume of new legislation.”He goes on to liken it “to trying to walk up a down-moving escalator.”

Contrary to what the old, award-winning HMRC adverts used to tell us, tax is taxing – and that’s why you need specialists to deal with it.That’s why there is a separate, specialist qualification for tax professionals – the CTA – that takes them beyond the level of the average CA, CIMA or other accountancy qualification. Yet too many companies delegate this vital area to someone who, while not unaware of the details, too often lacks the in-depth knowledge and experience that is required in today’s increasingly complex, tax environment. It is a classic case of square pegs in round holes.

Alternatively, they hire external advisers whose knowledge of the firm is only surface deep. In other words, because they don’t know what you don’t know, these advisers will only answer the questions you give them, with all the potential for error that implies. As a result, it’s questionable whether many firms which go down this route actually get value for money – and in my experience they sometimes get poor advice in key areas, which consequently brings the issue to the attention of HMRC. As we all know, the last thing any firm’s CEO and CFO wants is an HMRC investigation…

As a result, tax is rising up the agenda for CFOs and CEOs. However, unless a company is big enough to employ a genuine tax expert (most aren’t), many firms are cutting corners and getting either external consultants or their accountants – all decent, talented people no doubt – to deal with tax matters, despite the rising threat of reputational risk if errors occur and become a matter of public record.

The challenge for the tax professional working inside a business is how to apply their skills equally to ensuring their employer reaps the rewards of tax optimisation whilst also taking the necessary steps to avoid the potential costs of getting it all going horribly wrong. Every business is different, but there are a number of common goals and objectives, including, but not limited to:

·        Reducing risk – Transfer pricing, robust internal systems and controls

·        Significantly reducing professional services fees/getting value for money in these fees

·        Business partnering/optimising the tax position

·        Enhancing processes and systems to ensure infrastructure is in place for growth/sale

·        Providing assurance and improving relationship and risk rating with HMRC

·        Proactively making plans for changes in tax legislation, such as IR35, digital tax, Brexit impact on customs, furlough/WFH tax exposures and, of course, MTD.

Given Cedar’s well-established track-record in accountancy and finance, these are the kind of issues that my colleagues are increasingly hearing about from our clients and it’s no surprise that we have seen a trend towards more and more businesses making a tax expert a key hire. Which is where I come in…

I’ve joined Cedar as the Head of our new Tax Division, bringing over 15 years’ experience of recruiting exclusively within the in-house tax market. In that time, I’ve built up one of the very best networks in this area and worked across all sectors, placing permanent and interim candidates across corporate tax, indirect tax, transfer pricing, and human capital, from Head of Tax/Tax Director level to Tax Manager. I’m looking forward to meeting both new and existing clients to discuss how we can help them avoid continuing to fill those round holes with square pegs!

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