Salaries in tax weather economic turbulence better than any other financial profession, and have remained stable for the past few years. Ian Palmer and Will Hepworth give us an insight into the sector’s job market, and guidelines about the salary and benefits that someone entering the tax profession can expect to receive.
The jobs market
While the last few years have been relatively slow for tax recruitment as the economy recovers from the recession, this year the shackles are beginning to come off and confidence is starting to grow. This is particularly the case with regards to the Big Four professional services firms. Two clear examples of this confidence came in figures published earlier this year, with EY revealing they have a ‘20:20’ vision to double the size of their tax team in the UK between now and 2020, and PwC releasing a mandate in January for 30-40 new mergers and acquisitions (M&A) roles in their tax department.
We have seen less dramatic evidence of recovery on the in-house market, where some organisations have managed to automate processes and improve efficiency during the recession, and thus no longer need to grow headcount back to the same levels as 2008. Nevertheless, there has been an increase in recruitment activity.
Most notably, there has been a rise in the demand for compliance and reporting specialists within established tax teams, and many small and medium-sized enterprises (SMEs) are recruiting tax specialists in-house for the first time. In addition, there has been an increase in movement at the senior end of the market, which can cause a knock-on effect in other departments within the same sector.
The introduction of the Foreign Accounts Tax Compliance Act (FATCA), basic earning power ratio and the increased clamour for tax transparency have meant that compliance specialists arguably possess the most in-demand knowledge, with many multinational companies looking to recruit individuals in this area. As ever, there are also opportunities in specialist areas such as property, transfer pricing and M&A tax.
In terms of soft skills, it is also becoming increasingly clear that the most successful candidates in the sector are those who are commercially-minded and possess the communications skills to build relationships. Whereas in the past recruiters may have looked for encyclopaedic knowledge of tax law alone, now they are looking for more rounded individuals who can combine these skills with an ability to see the wider business picture.
Salaries and benefits
Salaries in the sector have remained relatively static in recent years, particularly for newly qualified employees. However, in more senior areas there has been a slight increase in pay, especially for those with in-demand skill sets. We are seeing big counter offers as the Big Four try to hold on to their most valued staff. We are also seeing a trend of companies offering increased benefits to keep top talent in specialist areas.
Looking to the future
In general the outlook is positive for tax and accounting professionals at the moment, and as we continue to receive good news on the country’s economic recovery, we expect salaries to continue to pick up.
Going forward, we predict more activity within mergers and acquisitions, which is an indicator of the current confidence of the market, as well as an ongoing demand for compliance specialists to meet the needs of an increasingly regulated market. We are expecting demand for tax specialists to continue across the Big Four, and on the in-house side, where progress has been slower, we expect recruitment activity to pick up further down the line.
|Tax Salaries in London|
|Level||Corp. tax||VAT||Transfer Pricing||OPS tax||Personal tax||Human capital tax|
|Part qualified (0-2 years)||£26,000-£34,00||£25,000-£34,000||£26,000-£35,000||£28,000-£35,000||£24,000-£34,000||£28,000-£34,000|
|Newly qualified (2-5 years)||£40,000-£50,000||£35,000-£48,000||£35,000-£48,000||£35,000-£46,000||£35,000-£46,000||£35,000-£50,000|
|Manager (5-7 years)||£50,000-£65,000||£50,000-£65,000||£50,000-£64,000||£50,000-£67,000||£50,000-£64,000||£52,000-£65,000|
|Senior Manager (7-10 years)||£70,000-£110,000||£70,000-£105,000||£70,000-£100,000||£70,000-£100,000||£70,000-£100,000||£70,000-£105,000|
|Director (10+ years)||£110,000-£180,000||£110,000-£150,000||£100,000-£150,000||£100,000-£150,000||£100,000-£150,000||£95,000-£170,000|
|Partner (15+ years)||£150,000+||£150,000+||£150,000+||£150,000+||£150,000+||£150,000+|
Note: salaries in London are typically higher than the UK average. All salaries in the table above are approximate figures to be used for guidance only. For further information on salaries, please contact Will Hepworth in Morgan McKinley’s specialist tax team at [email protected]