Jun 14, 2023
Tax Practice vs. Industry: The Big Debate
As a tax professional, you will inevitably come up against the decision of whether to build a career in practice or to move into an industry role. Both have their pros and cons, and your decision will ultimately come down to what type of person you are, what is important to you in your career, and your long-term goals.
Making this decision can often be difficult as roles in practice and industry both have a lot to offer, but our specialist tax recruiters have put together key advice to help you make an informed decision!
Type of Work
The type of work can differ quite significantly between tax roles in practice and in commercial business’ and the type of work your role will entail will depend on the company. In practice you are likely to specialise in one specific area, whether this is corporate tax, investigations, personal tax or VAT etc. A positive of this is you become a real deep tax specialist and have the ability to work on a variety of clients, often in varying sectors. On the other hand, working in-house allows you to fully immerse yourself in one business and look at the company in its entirety. You will be working in a more commercial role and get closer to the business and see how different departments interact, such as legal, sales, finance and tax, and in this way, an in-house tax position can perhaps offer a broader role. Another point to consider is whether you are looking for a role that is highly client-facing. If this is the case and client interactions are something you enjoy, a role in practice is likely to suit you. However, with this also comes client pressures. Timesheets and billings are a necessary part of a tax role in practice and is one of the biggest reasons why people choose to move in-house. Due to the nature of an in-house role, it is rare that you will have timesheets or financial targets, and typically you will have more autonomy over your work, with your working environment often more relaxed due to the absence of client pressures. Lastly, if you are looking to be involved with the business development side of the firm you work for, you are best to seek a role within practice as opposed to in-house. Business development is a big part of working in a tax practice role, especially as you move up the food chain, as you will focus on building and maintaining client relationships while with an in-house role, you will instead focus on raising the profile of the tax team within the wider organisation.
Salary & Benefits
When it comes to benefits, a role in a well-established practice with defined risk & reward teams will see you receive a healthy remuneration and benefits package. Working for a commercial business, whether this is a FTSE 100, US-listed or Fortune 500 business, you will receive not only a good remuneration package but also additional benefits including flexible working and commercial discounts. Differences in salary between in-house and tax practice roles depends on the level you reach within your company. Initially, although you may be willing to take a pay drop to move in-house there is often no need to, as a move in-house typically comes with a 10-20% pay increase and a premium. As a general rule, you will always be better paid within industry up until a certain point, which is when it comes to Partner vs. Head of Tax. Working in practice as a Partner will always outstrip the earnings of a Head of Tax in a commercial business, although of course there are always exceptions to the rule. Therefore, when considering which path to take it is important to consider your long term career goals and whether your ambition is to end up as a Partner or Head of Tax.
Working hours tend to be better with in-house tax roles as opposed to in practice. There are usually smaller teams with a collaborative working pattern as opposed to the larger structured teams you often find in practice. Additionally, client responsibilities with a role in practice mean you need to be on call and meet clients, whereas in-house roles can offer better flexibility and opportunities to work from home, as well as regular working hours and less late nights, allowing for a better work-life balance. Although this is typically the case there are, of course, some exceptions and more large tax practices are now understanding the value a healthy work-life balance adds to employee effectiveness and happiness, and are making inroads to improve this.
Working in-house gives you the opportunity to move around the business, both across and upwards. You will work in a smaller team which gives you more responsibility in your role which will only broaden your prospects in the future, and there can be good opportunities for progression as in-house teams tend to have less of a rigid structure than tax teams in a large practice. However, in some circumstances it can be difficult to move upwards - ultimately, it depends on the company. While some large commercial companies, like those in the oil or automotive industry, have huge tax teams with structure and great progression opportunities, other companies have very small or even one-person tax teams. While this gives you more autonomy in your role, the opportunity to work closely with the Head of Tax or Director and exposure to different services lines within the company, this can also limit your opportunity to progress within the company itself. On the flip side, working in tax practice typically offers a clear and structured progression route. You will be in a position where if you hit business development and financial targets and pass your qualifications, you will move up the chain. Whilst an in-house role could potentially be a stand-alone position with limited resources to call upon, in practice, you are surrounded by technical expertise and talent. You will be working at the forefront of changes in legislation and therefore a role in practice provides you with excellent learning opportunities, as well as good progression prospects.
Ease of Finding a New Opportunity
It is relatively easy to move from practice to an in-house role, particularly if you are newly qualified and coming from one of the Big 4 or Top 10 as you will be highly sought after. Once you have in-house experience, you will find other doors open for you to take a step-up role in another commercial business, as some positions will require relevant experience. One of the main benefits of working in-house is the opportunity to work for a household brand or in an industry you’re interested in, whether this is retail, media, construction, automotive or telecoms, to name a few. Once you have chosen to move into a commercial business, it can be difficult to move back into practice. The longer you spend away from practice the harder it becomes, as you may find you lose the client-handling skills essential for practice. Therefore, it is important to be sure where you want to end up before making the move in-house and consider the wide range of career opportunities available to you within practice. Ultimately, your decision will come down to what type of work suits you and what you want from your career as a tax professional. If you are looking for a role within a company whose brand and household name excites you, and where you will have a broad, autonomous role and opportunities for flexible working, then a role in industry may suit you. On the other hand, if you are looking for a client facing role that sees you working on business development and at the forefront of changes in legislation, with clearly defined learning and progression opportunities, you should pursue a tax role in practice.