"What are the benefits to my business if I hire an in-house tax professional?" is a question I am regularly asked by Financial Directors and CFOs from organisations within commerce and industry. With tax law becoming more complex and under increased scrutiny in the media, it makes commercial sense for organisations to consider hiring a dedicated tax professional. FDs and CFOs are becoming increasingly stretched and are unable to give tax the focus it requires. An in-house tax advisor can bring more than just control of tax efficiencies to a business, they can also help create and develop strategy to assist with business growth.
Brewer Morris has recently produced a guide for businesses called “Hiring your first in-house tax professional”. By means of introducing the guide, this short article touches on some of the challenges faced when an organisation does not have an in-house tax professional, the benefits of employing one and understanding when is the right time to do so.
Challenges of Outsourcing
Outsourcing tax compliance and engaging with tax advisors can often be costly and depending on the complexity, the associated cost will often outweigh the salary of employing someone in-house.
One of the common concerns we hear from FDs and CFOs is that an outsourced tax advisor will not and cannot be expected to understand the commercial position. Very often tax advice will be related to isolated issues and may not be commercially viable to see through.
Even outsourcing the function can be very time consuming for the FD/CFO to manage, therefore hiring a dedicated in-house tax person means any outsourced expenditure becomes more closely managed and controlled.
Benefits of Hiring a Dedicated Tax Professional
The most obvious benefit is that the business will have greater control of their tax affairs and tax risk. A tax professional would look to improve existing systems and controls that generate efficiencies in internal processes, as well as establishing strong relationships and trust from HMRC.
"A good quality tax advisor can bring continuity and generate buy-in from the senior management of a business."
By having a complete understanding of an organisations tax affairs, the tax advisor can educate the senior management team in assisting business strategy and bringing a commercially minded, proactive approach when making business decisions.
When should a firm hire their first tax professional?
Should they have one from the inception of their company or should considerations only be made when the business is growing? Whilst there is no specific time when a business should employ their first tax professional, there are circumstances when serious considerations should be made. These include:
- When outsourcing costs begin to increase
- HMRC’s risk rating increases
- Increased tax audit activity
- If ETR is particularly high
- A business needs to publish it tax strategy or are required to have an SAO
Brewer Morris has been working with businesses for 30 years and as such as we have seen a variety of organisations build their first tax function. We have recently launched a guide to assist organisations who want to hire a dedicated, in-house tax professional. The guide elaborates on the points above as well as providing case studies showcasing when Brewer Morris has assisted businesses who brought their tax function in-house.