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How to Become a Tax Accountant

The position of tax accountant is one of the most in-demand finance jobs in the United Kingdom. In fact, according to research conducted by the recruitment firm Randstad Financial & Professional, the UK will need an extra 80,000 accountants by the end of 2050, including tax accountants.

This shortfall is perhaps due to the fact that the job role requires highly-skilled people working in a highly-disciplined field. If you have what it takes to become a tax accountant, and you dedicate yourself to training in a high-pressure environment, it should be easy to find a job opportunity once you’re qualified.

On the surface, this may not seem like an especially important job, but the opposite is actually true. Tax accountants are an essential part of companies’ future business success. In the role of tax accountant, you would help organisations and clients to reduce their tax costs and maximise their profits.

With a strong work ethic and years of experience, you can expect to receive a handsome salary in return for your hard work.

In the following insightful guide, you’ll discover what tax accountants do, what the job description of a tax accountant is, what key skills you need to possess to do the job well, and what level of salary you can expect to earn.

You will also learn what qualifications you need to become a tax accountant and what routes into the profession are available. Is the career of a tax accountant right for you? Read on to find out.

What is a tax accountant?

As a tax accountant, you will work with organisations or individuals to assist them in paying the right amount of tax at the right time. Your main duties will be to prepare and analyse financial and tax statements for your clients to ensure the correct amount of tax has been paid on all earnings and investments.

You’ll usually work in office environments during normal business hours, from Monday to Friday. However, you may need to sometimes work overtime in evenings and at weekends, especially around the end of a tax year.

Most tax accountants work for accountancy firms, but you can also work as a freelance tax accountant, in which you would have many different clients. You can be employed by one single company in a non-financial sector as well. By specialising in tax accountancy, you could work for public sector bodies, multinational consumer companies or global charities.

What do tax accountants actually do?

Tax accountants can have a number of duties and responsibilities other than preparing and analysing tax statements and business spending. Often, you’ll advise clients on how they can legally save on the amount of tax they pay. This means you must constantly be up-to-date with changes in tax laws, as these alter quite frequently.

You need to know of any legal changes that affect your clients. The role of a tax accountant also involves helping clients to plan their finances to maximise their profits. You’ll be advising clients on other aspects of tax as well. In addition, you’ll provide advice on the best way of performing business transactions and setting up business structures. You’ll need to ensure your clients are keeping the right records too.

Tax Accountant Job Description

On a daily basis, you will have to master technical details and provide solutions to complex financial problems. The job will involve performing tax planning activities, completing and submitting tax returns, explaining tax laws to clients, planning strategies and ensuring regulatory compliance is adhered to. Other aspects of a tax accountant job description include:

  • Advising clients on tax requirements.
  • Preparing annual financial records.
  • Preparing tax accruals for company accounts and records.
  • Producing tax computations.
  • Researching tax legislation.
  • Knowing how best to set-up overseas operations.
  • Corresponding with other departments and organisations.
  • Developing strong relationships with clients.
  • Reviewing work by junior accountants.
  • Working closely with HM Revenue & Customs.

Key Skills for a Tax Accountant

To become a tax accountant, it’s essential you have a high level of numeracy. This role isn’t just about the numbers though. You need to be an excellent communicator, as you’ll regularly have to make sense of complex information and explain it in layman’s terms to non-specialists. Other key skills you’ll need in order to succeed as a tax accountant include:

  • Paying attention to detail and being thorough.
  • Analytical skills.
  • Time management skills.
  • Knowledge and application of law.
  • Organisational skills.
  • Problem-solving skills.
  • IT skills.
  • Trustworthiness.

Useful Work Experience

By doing a work placement, you’ll get invaluable experience and learn plenty of the skills required to become a successful tax accountant. Some financial companies offer accounting internships. This is a great way of getting a work placement.

You could also directly approach businesses with financial or accounting departments and ask for a placement. Alternatively, you could approach a company and ask to do work shadowing. Whatever type of work experience you get, you’ll be in a good position to take the next steps in becoming a professional tax accountant.

Average Salaries for Tax Accountants

Tax accountants in the United Kingdom earn £29,178 per year on average. However, if you work for a large company, you can also expect to receive healthy bonuses. Sometimes, you can receive a small share of the company’s profits too.

As an entry-level tax accountant, you can expect to start off on around £18,000 per year. As you gain more experience, expertise and qualifications, you will see your salary increase accordingly. At the highest end, experienced tax accountants can earn £50,000 per year, which means you can nearly triple your entry-level salary.

Qualifications for a Tax Accountant

Most tax accountant have a Bachelor’s degree in accounting or in a similar field of study. Furthermore, some employers prefer you to have a Master’s degree or certification, such as Certified Financial Planner or Certified Public Accountant. If you have a relevant degree, you may be able to begin working for a company while training to earn a qualification from a professional industry body.

Another option to become a tax accountant is to join a company in a trainee position. You can then receive professional training while you work. To take this route, you’ll need to have good grades in GCSE maths and English as well as two or three A Levels, or equivalent qualifications.

You can become a tax accountant through a higher apprenticeship scheme too. If you already work in tax or financial services, you also have the option of enrolling with a Level Four Higher Apprenticeship in Professional Services. You can earn an industry-recognised qualification from the Chartered Institute of Taxation or the Association of Taxation Technicians.

Whichever route you take, you will have to work towards a recognised qualification awarded by a professional industry body in order to become an actual tax accountant. Professional qualifications in taxation are offered through the Chartered Institute of Taxation and the Association of Taxation Technicians. To gain a recognised qualification from either body, you must successfully complete assessments and examinations.

Career Progression

You can progress in your career by climbing the ladder to positions like tax manager and tax compliance manager. Tax managers earn between £31,000 and £65,000 per year. Tax compliance managers earn between £39,000 and £64,000 per year.

Alternatively, if you get years of experience under your belt by working for a company, you could consider going it alone and setting up your own tax accountancy business. There are a huge number of different accountant positions available though, so you also have the option of moving out of tax accountancy and into another accountancy sector, such as management accountancy.

By progressing to positions like finance manager or finance director, you will have more responsibilities and a higher wage.

In Conclusion

In the role of tax accountant, your main tasks will involve working with clients or companies to ensure they pay the right amount of tax on all earnings and investments. You will prepare and analyse financial statements and records and offer advice regarding how tax payments can be legally reduced and how profits can be maximised by implementing new plans. You’ll have to have great analytical skills, problem-solving skills and communication skills if you’re serious about becoming a tax accountant.

There are several routes into the career, and it certainly helps to have a degree in accountancy or a related subject such as financial services or economics.

However, it’s not compulsory to have a degree. For instance, you could join a company in a trainee position, in which you’ll only need to have a certain number of GCSEs and A Levels, or equivalent qualifications.

Alternatively, you could begin your career through an apprenticeship scheme. Whichever route you take, you’ll have to study for an industry-recognised qualification before you can become a professional tax accountant. If you think you would be suited to a career in tax accountancy, consider which route to take is the best option for you.