Whether you’re a tax employee, tax hiring manager, or just a weirdly keen tax labour market enthusiast, you might have noticed there’s a serious shortage of qualified tax professionals in the UK. In this article we explore some of the reasons why.
Supply & Demand
The tax landscape in the UK is morphing faster than you can say "deductible expenses." Ever-evolving tax legislation, changing government regulations, and international tax agreements, mean the demand for skilled tax experts has never been higher.
As this landscape becomes more intricate, so do the skills required. Young talents fresh out of universities might have the academic knowledge, but the real-world skills and experience often require years to accumulate.
The consistently increasing number of SMEs popping up also means there are more businesses seeking tax guidance, which further ups the ante on the demand for qualified tax professionals.
The supply side also isn't keeping pace with this exploding demand and the problem is particularly noticeable in smaller firms where there is often a lack of resources to attract and retain staff.
Competent tax professionals need to be agile, well-versed in a variety of areas, and constantly learning. But this isn’t appealing to all in the industry, with tens of thousands of tax and accounting staff choosing to quit the profession altogether during the pandemic, significantly reducing the supply.
Another factor impacting the supply might be the lengthy and notoriously difficult route to gaining Chartership. CTA papers can only be sat every six months and require vigorous study. This may be off putting to many looking to get into the profession who don’t have the time to study alongside full-time work, and failing to gain the qualification can often stifle career progression.
Many seasoned tax experts who've been in the game for decades may be approaching retirement, so the industry is witnessing a changing of the guard, but the problem is, there aren't enough young guns ready to fill their shoes.
But this isn’t just down to a lack of interest in the profession among young people. With experienced tax pros retiring, there's a knowledge gap that's not easy to bridge overnight. Mentoring and passing on years of expertise takes time and isn’t something that can be rushed easily.
Technological advancements and AI
While technological advancements have revolutionised many industries, they're also changing the tax game. Automation and artificial intelligence have stepped into the tax arena and are already automating routine tasks like data entry and document review, but this is just scratching the surface – Big 4 accounting giants recently pledged to spend billions on AI services over the next five years, and it remains to be seen what impact this will eventually have on the tax labour market.
Some might view the technology as a double-edged sword. On one hand, it enhances efficiency. On the other, it might give the impression that tax expertise isn't as crucial as it once was. At least for now though, while tech can do the heavy lifting, it still takes a human brain to decipher nuanced tax strategies and navigate the unpredictable seas of tax law changes.
Tackling the tax talent shortage
It’s clear the gap between the need for competent tax wizards and the actual availability of qualified professionals is widening.
So, what's the solution? It's a multi-faceted challenge that requires collaboration from various corners. The simplification of tax law within government would be a good starting point, but this has been attempted unsuccessfully on many occasions (and with the recent abolition of HMRC’s Office for Tax Simplification this only seems less likely).
Universities could modernise their curriculum with the evolving needs of the tax industry, equipping graduates with practical skills and knowledge, such as can be obtained through gaining the CTA qualification.
Accounting firms could invest in training and mentorship programs to bridge the knowledge gap and take better advantage of government CTA apprenticeship schemes.
The tax industry itself needs to showcase its allure to young talents - tax is less about crunching numbers than it is about interpreting everchanging legislation and developing a financial strategy around client’s differing wants and needs. It's about making an impact on individuals, businesses, economies, and society.
So, by nurturing young talent, valuing experienced professionals, and embracing the dynamic nature of taxation, we can gradually stitch this tax talent tapestry back together.
If you're a tax enthusiast eyeing the tax world, rest assured – your skills are in demand. And if you're a firm seeking tax talent, remember that investment in people is an investment in your future success.