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Entering 2020, the defining challenges for tax professionals were clear: the looming Brexit cliff-edge, a continued drive towards tax digitisation and a dynamic legislative landscape. The unprecedented Covid-19 pandemic thrust many of the expectations into the periphery, at least for a time, and presented a wholly unique set of new challenges.
Many basic principles of working life no longer bore true, and everyone has had to manage the delicate balancing act of professional and personal life. Against this backdrop tax leaders have faced one of their most challenging years, having to adapt to rapidly changing business objectives, and in many cases do more with less and for less.
The initial impact upon tax departments was relatively consistent across industry sectors: an immediate focus on areas that directly impact the cash flow of the business and ensuring the smooth and timely delivery of tax compliance in a challenging dynamic of remote working.
The impact for many industries was severe: between March and July we saw no tax vacancies in leisure & hospitality, travel, or energy & resources. Fortunately, tax functions seem to have been spared large-scale redundancies – most of our respondents reported no enforced headcount reductions in 2020.
Once the initial shock had subsided in early summer and the ‘new normal’ was established, we saw a quick resurgence across the broader tax job market. For indirect tax, the priority has been critical operational hires in VAT compliance and advisory.
Tax technology projects has also featured heavily, with many organisations having already embarked on multi-year implementations which continued to receive funding through 2020. More strategic and leadership orientated roles have been less prevalent, however we expect a shift in 2021 as businesses recover to pre-pandemic conditions.
Remuneration has also remained relatively consistent throughout 2020, with few respondents reporting enforced salary reductions. While many respondents reported lower cash bonuses, those receiving shares via long-term incentive plans tended to do well, mirroring the record year for many stock indexes. Salaries for team members is more problematic, and retention of staff may be challenging in a cost-constrained environment.
This year, we explored the impact remote working has had on tax functions. On the whole, tax professionals were able to effectively deliver against their responsibilities working remotely. However, a large proportion of respondents reported negatively on team cohesion, employee morale and corporate identity.
Much of this can be contributed to strict lockdowns enacted across Europe, but it is clear many professionals are eager to return to a structured work environment, albeit maintaining a degree of flexibility experienced through the pandemic.
The recent completion of a Brexit deal has also led to significant challenges for many businesses in the retail, FMCG and industrial market segments. The post-Brexit landscape for services, particularly in the finance sector, remains opaque.
Businesses operating in the digital area have also faced significant challenges, with substantial rule changes and ongoing governmental debate surrounding the fair taxation of profits.
Going forward, as governments will seek to rebuild tax revenues, we expect substantial legislative change. Fortunately, all these dynamic challenges underscore the importance of the tax function and will sustain healthy career prospects throughout 2021.
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