RICHARD CURTIS BATTLES WITH THE CONCEPT OF TEMPORARY TAX
Income tax is, as I am sure you are all aware of course, a temporary tax. It was introduced by William Pitt the Younger in 1799 to help pay for the war against Napoleon Bonaparte, ‘Boney’ to his friends, but moving rapidly on ...
The new tax was abolished a few years later in 1802, but the rejoicing was premature and, following renewed hostilities, it was re-introduced in 1803 and it has been with us – temporarily of course – ever since the mid-1800s.
Nowadays, the term temporary tax more normally refers to someone who is working on a temporary basis for a firm. In fact the terms ‘interim’ and ‘temporary’ are both spoken of in this regard, but what exactly is the difference?
Perhaps the lines have become somewhat blurred, but basically we could say that temporary contracts might be an extra pair of hands as short-term holiday or illness cover, or while a permanent replacement is found.
Conversely, interim positions may either be longer contracts, say to cover maternity leave absence, or to work on specific projects. Interims will probably be acting on a consultative basis and can offer diagnostic advice, often identifying issues not immediately apparent.
The term ‘interim’ can be used to encompass all non-permanent employment and it is also used to describe the senior end of the temporary market.
Starting out
Most people working in tax on an interim basis already have some tax experience and for one reason or another decide to work on temporary assignments rather than a permanent basis. But it seems that it can occasionally work the other way around. Steve York, a tax manager at Winter Rule LLP, explained.
‘I’d left university with a maths degree and was wondering what to do career-wise when I saw an advert and was accepted for a three-month temporary contract working for HMRC in their St Austell claims office.’
Steve’s interest in tax had obviously been whetted and when he saw that Winter Rule needed a tax department assistant, his experience stood him in good stead.
‘I went for an interview, explained that I’d had some experience working for HMRC and the firm took me on as a trainee’ said Steve. ‘I must be enjoying it because here I am 14 years later still at Winter Rule, only now I have the ATT and CTA qualifications and I’m dealing with high-net worth individuals and reviewing other work. Winter Rule has been a great employer and what started out as a temporary “taste” of tax has resulted in a very satisfying career choice.’
Adding value
Steve’s experience is probably unusual and Mo Hanslod, associate director at Brewer Morris, suggested that there are three main reasons for choosing the interim tax market.
‘First, it might be a lifestyle decision. The person may have been made redundant or might desire longer breaks for travelling, etc. Secondly, it’s a way of gaining exposure to other tax sectors without the commitment of a permanent role. Finally, money: salaries can be higher than for permanent roles, with employers paying a premium for immediate expertise.’
Work in interim tax is no longer simply an extra pair of hands and the positions are likely to require more in-depth knowledge. Practitioners with specialist knowledge are likely to find their services much in demand; for example, Sarbanes-Oxley issues, employment tax, value added tax and transfer pricing.
One word of caution is that, having worked on a temporary basis, it can be difficult to break back into a permanent position. However, from the employer’s point of view, the plentiful supply of potential temporary employees means that they can bring someone in for a short-term contract and see how they get on, with a view to offering them a permanent position later on.
Temp to permanent
Mo’s thoughts that a temporary position might lead to something more permanent probably apply to Pete Miller, as explained by him.
‘I found myself without a job in January 2009 after spending most of my tax career dealing with large corporates and groups. I was fortunate enough to find temporary work with a local firm, Powrie Appleby LLP, in Leicester. In terms of the effect on my tax career it was obviously a major change working for owner-managed businesses, small companies and wealthy individuals, i.e. the people who own and run the businesses, not just the heads of tax for large multinationals.
But this had a number of advantages. It opened my eyes to a whole new world of tax advisory work, where I started dealing directly with the people whose business it was and whose personal wealth was at stake. Secondly, it was a huge confidence booster, as I was able to get to grips with new (to me) areas of the tax code, such as ITEPA, ITTOIA and even inheritance tax, relatively quickly.
‘The best bit was the end result: I loved the work and the clients and, indeed, the smaller firm atmosphere and I was absolutely delighted when I was asked to join the partnership last summer.’
Motivation and demand
Alex Lawrie, associate director taxation & treasury at Morgan McKinley, felt that, overall, the tax market was picking up and so might interim opportunities.
‘The economy is coming back to life and recruitment budgets are starting to increase. One way of developing existing staff is to put them on projects – so keeping them motivated and interested – while taking temporary staff to cover their now vacated normal line roles.’
Alex noted that there is currently a high level of demand from investment banks and finance houses, particularly in the fields of corporate tax, VAT and transfer pricing.
‘Also, there appear to be a fair number of people taking maternity leave and this creates a need for cover over a specific period. There is still a reasonable amount of competition in the market for such roles, although not as much as a few years ago because there no longer seem to be so many qualified tax practitioners coming into the UK from Australia and New Zealand.’
As a general rule, Alex would never encourage someone to leave a permanent role and take a career in an interim role. ‘It sounds like a great lifestyle, plenty of flexibility, with time off when you want; but the reality is that whenever there is a gap in a CV there is a question of why. Also, at the rate that tax has been changing, major changes may have taken place during, say, a six-month gap, so there will be the worry that the practitioner is no longer up to date.
‘If someone has been made redundant or taken early retirement and if they are flexible as to pay and location they can get a steady stream of work, but the rate of pay can vary depending on supply and demand.‘
Sector exploration
Allison Tait, director at Georgiana Head Recruitment, also noted that ‘maternity cover is the most common reason for our clients to seek a contract worker and these placements can span from between six to 18 months in length, although other reasons can be to cover long-term sickness or to help a department during a busy period such as year end. A contract position can often be a good way for a tax professional to explore working in different industry sectors without signing up for a role on a permanent basis, although in the current climate it is a risky strategy to leave a permanent role for a contract one.
Jane Stephenson relocated from London in the summer of 2009 and is currently undertaking a 12-month contract role at De-Puy in Leeds. Jane said ‘I have really enjoyed my time working in industry; I have gained exposure to a broad range of taxes. In addition, this role has given me the opportunity to learn all about how tax is managed in-house, from compliance to forecasting. It’s been a fantastic experience which I believe will prove invaluable in the future’.
Costs & considerations
Kirsteen Brannigan, a consultant on the commercial tax team at Integral Search & Selection noted that a variety of factors are now coming into play. ‘Regarding the market generally, there are no set trends. Some firms try not to use contractors – let’s face it, it can be difficult to bring in temps when the company has just made redundancies; but others see interim workers as a way of avoiding taking on permanent employees. These firms use interims as a means of avoiding more substantial consultancy fees. Large firms have laid senior people off and their expertise can now be obtained on an interim basis at a lower cost.
‘A few years ago, “career contractors” were fully occupied, but more recently they may have struggled as others have also been looking for work on that basis and may have more permanent looking CVs. Whereas, historically, people could get away with a more “jumpy” CV this might be more difficult now. Temps have had to be more flexible in their roles. People are starting to undercut each other.’
Kirsteen also warned of the downsides of this career path unless you are financially secure.
‘Interim work might be more suitable for the more senior people who could start their own tax consultancy and perhaps work in a few temporary roles as well.’
Your own business
As mentioned by Kirsteen, many practitioners working in the interim tax area operate via their own limited company – a look at ITEPA 2003, s 44 will explain why – and some may use the ability to take on fixed-term contracts to underpin their own consultancy business. Penny Bates, who recently started her own consultancy, Aurora Tax Services Ltd explained that there were other advantages to this type of work.
‘Working on interim contracts gives you the opportunity to try different fields of tax practice where perhaps you are unsure as to whether that particularly area would be of long-term interest for your career; for example, working in-house for a period.
‘Interim work also gives a level of flexibility which for some people is important; e.g. for mothers with school-aged children or those wishing to pursue other interests for part of the time. I know of several people who work in personal tax on an interim basis during the busy period to enable them to travel abroad in “down time”. Interim work may also be a way of getting back “into flow” and could be seen in a positive manner by any future potential permanent employers.
‘The downsides must be considered as well – the possibility of not finding a contract when you want one; the general lack of ability to join an employer’s pension scheme, etc.’
Just temping?
What makes a good interim candidate? Mo Hanslod says that ‘employers seek innovative tax professionals who are not only able to add value to a project, but can also bring commercial awareness through experiences in previous interim assignments. A good interim should be able to hit the ground running and build relationships quickly while connecting to the organisation.
‘Being an interim can be a shrewd career move; the ability to gain access to varied and interesting work without the shackles of office politics can be seen as a positive enhancement to the CV.
‘Increasing numbers of people seek interim work to gain greater flexibility to their work/life balance. In theory, this should allow extended time for breaks between contracts; but in practice, interims can find themselves under pressure, not only working long hours during their contacted period, but also having to use out of contract time to network and research the market so as to secure future contacts.’
So to misquote another French king, if you believe that ‘le tax, c’est moi!’ then you may be able to rule the world of interim tax. But also bear in mind that, just like any military campaign, the world of temporary contracts can have its ups and downs; like Boney, just make sure that you don’t meet your Waterloo.
