For many businesses, knowing “hiring triggers” can be difficult – especially when you have multiple teams and seniorities to account for, and the same goes for hiring your first in-house tax professional.
Traditionally, many organisations rely on external accountancy firms, either due to not needing human resources or for the ease of outsourcing. However, the costs associated can be exponential – and when businesses get to a specific headcount (or turnover number), it’s time to bring the function in-house.
What are the benefits of an in-house tax professional?
Although there are some excellent external partners out there – and for many businesses, this is the best option for them – the personal investment and relationship building that an in-house tax professional can provide is second to none. They are an important part of your Finance unit, and can facilitate difficult or time-critical conversations quicker than an external agency due to them being “on the ground” and having a depth of knowledge about your business and the individuals within them.
Naturally, this individual is going to become a core part of your business – and they will play a key part in educating those within it about changes of legislation, tips and advice, as well as things to look out for. The in-house tax professional acts as a key communication hub between multiple internal functions – and works closely with the CFO to ensure adequate compliance across the whole business.
It’s no secret that the expense of working with an external partner will cost far more than an in-house professional. Although the initial hiring costs and salaries may feel like a bigger “down payment” in the first instance, the long-term value that an in-house professional can be coupled with their budget makes it a no-brainer.
Specifically, in the UK, a strong relationship in place with HMRC is paramount. There will be times when tax payments may be delayed, or cash flow is tight, and having a seasoned professional who knows the ins and outs of HMRC as well as the ability to build a trusting relationship with them is key to getting the best plans (and in some cases, tax relief) possible.
What type of tax professional should you look to recruit?
This will largely depend on the size of the company, the complexity of the tax issues that need to be dealt with as well as the scope of the role. The answer isn’t always to hire the most senior candidate on the roster.
However, if you do go for someone who has room to ‘grow’ into a role, you need to consider factors such as L&D and what is on offer to enable that individual to flourish with the business rather than drown in a sea of work – as this will only create more issues later on down the line.
And finally, you need to look at the range of taxes involved in the role and how this individual will fit within your finance function. If you’re in the process of bringing a complete finance function in-house, have a think about how this is going to work in practice from a technical perspective (you want to ensure that the team gels together and their skills complement each other) as well as commercially (spending a lot of budget at once as well as building a role/function from the ground up).
Technical skill aside, as these can widely vary – and a lot of mid-range candidates will have the ability to “learn on the job” and develop themselves fairly quickly, the most important attribute that you must look for is commercial awareness and a great culture fit.
Culture fit is incredibly unique to each company – and often when businesses hire they can mistake culture fit for someone who will “blend in” to the background rather than culture add – who is someone that will elevate your culture and your team, as well as have the right attitude and presence to establish trust and buy-in from the outset.
The ability to do this requires a certain type of personality – and although this will vary slightly from business to business – you must ensure that you draw the correct balance between personality and technical ability, so this individual can hit the ground running.
There are three different types of candidate pools that you can look at:
- In-house tax professionals
- Tax professionals from Accountancy firms
- Interim Talent
In-house tax professionals are generally more favourable to hire due to already knowing the ins and outs of working in-house, being well-versed in stakeholder management as well as being in tune with business drivers and potential pain points.
Generally, a tax professional with in-house experience will also be great with external partners due to potentially having had experience with migrating from an accountancy firm to an in-house function. It’s important to find out not just someone’s technical skills but their drivers and passion for tax as a whole so you can assess if they’ll be the best fit for your business.
External (Accountancy Firms)
The second option – which shouldn’t be discounted – is hiring a tax professional who has experience within an accountancy firm.
These individuals will be highly skilled and will be used to dealing with multiple businesses at any time – so it could be argued that although their in-house and stakeholder management techniques may not be as strong, they’re going to be well-versed in more areas and scenarios of tax due to having worked with a breadth of businesses.
If headcount, team structure, budget, or timeframes are going to be an issue – but you still need a resource quickly, hiring on an interim basis can be a great option. It gives you flexibility but with the key skills (often highly skilled and specialist) that you’ll need.
Recruiting on a temporary basis also allows you to have flexibility with the hours worked – as you may be in a transitionary phase where a full-time professional isn’t needed, or you may want the interim candidate to upskill someone in-house for a certain period of time so they can progress to the next level.