I started my career in tax when I was 17, immediately after leaving school. I had applied to join a sponsorship scheme with Arthur Andersen. This offered paid work experience before and during university as well as a cash lump sum to go travelling during a gap year. An attractive proposition for an impoverished student.
At the time of applying I had no idea how specialist a market tax is. This became apparent on my first day when I realised that the four ‘tax scholars’ were greatly outnumbered by our audit counterparts, who all thought we were mad to have chosen the tax route.
As with any profession, after the first few years you will know whether or not you have made the right choice and you can act accordingly. In my case I realised pretty quickly that I was better at selling than I was at interpreting tax legislation.
The situation is different though if you have enjoyed working in tax for 5 or 10 years but then yearn for a change.
I have summarised below the primary routes out of tax. Most tax professionals who fancy a new challenge are understandably reluctant to start from scratch again. Instead they want to build on their time spent in tax, be that within a professional services environment or in-house, where there is a more of a commercial focus.
The Classic Route
This is a well-trodden path. You train in tax and progress to manager or senior manager level with a Big 4 corporate tax department. You then move in-house so you can gain insight into tax work from the perspective of a CFO. After a few years you manage to persuade the CFO to give you more responsibility. Typically this will involve overseeing both the Tax & Treasury functions but could also involve an internal move to a Divisional Financial Controller role. From this point on you are no longer labelled a tax specialist, you are officially a finance professional and many progress from here to become a CFO/Finance Director.
The Playboy Route
An equity partner at any largish accounting Firm will have accumulated a decent stack of cash within 10 years. Given that a high-flyer can easily achieve partnership at the age of 30, this means that a 40 year old tax partner has the means to invest in other business interests. Perhaps it is a hankering to be young again, or an envy of their entrepreneurial clients, but I know a lot of tax partners who have opened a restaurant, nightclub or bar. I can see that the idea of popping into your own brasserie after work is an attractive one. It is pretty common for tax partners (having carefully checked the partnership rules) to own (and indirectly manage) a commercial business alongside their tax practice.
The Commercial Route
This is the riskiest option in my opinion. Here is a scenario – you work in tax for 8 years and you are currently a tax manager. You are good at what you do but you have no interest in becoming a partner, so you have reached a plateau. You like dealing with clients but the prospect of doing the same work for the next 20 years fills you with dread. You have a hobby or a passion that you have always wanted to pursue, but you followed you parents’ advice when you were young and joined a profession instead.
So now, in your late 20s, you decide to leave tax behind entirely. There are 2 usual routes:
1) The start-up route – you invest everything you have and borrow as much as you can to launch your dream business.
2) The client route – a former client or family friend recognises your commercial abilities and offers you a broad-ranging job at their owner-managed business
Both of these options are risky, not just because they might fail, but because every year you spend away from the tax market makes it exponentially more difficult to return in the future.
I spoke with Karen Then who has worked as a tax professional in the UK, Singapore and Australia. She spent time with Big 4 Firms and in-house, including two years as Group Tax Manager of Halliburton for the Australasia region. In 2011 Karen decided to leave the tax profession and start her own Bikram Yoga Studio in Perth, Australia.
Q. You had a successful career in tax and a varied one. What prompted you to start your own business ?
A. I wanted the flexibility and independence of becoming an entrepreneur and a small business owner .
Q. At the time did you consider your decision to be a risky one ?
A. Absolutely, there was the worry about whether I was abandoning all that I had spent a decade building up, in terms of knowledge and experience, and the sinking of all my savings into a new adventure.
Q Your Bikram Yoga business as grown and is obviously doing well. Do you have any regrets about leaving the tax profession ?
A. Once the business was up and running and I was kept busy and I didn’t mind the long hours. I knew I had made the right decision to pursue my passion and change of lifestyle.
Q With hindsight do you think you should have embarked immediately on a career in Yoga or did your time as a tax professional teach you skills that have helped build your business ?
A. With hindsight I would still have spent the same amount of time building up my career as a tax professional, as I definitely needed to mature in experience. I also needed to build skills that were invaluable in helping me run my business, for example negotiating contracts with third parties and dealing with clients.
Q. What advice would you give to tax professionals who feel insufficiently challenged or disillusioned ?
A. Do your best and work hard. The tax world is small and specialised with many good experiences to be had before you give it up. Speak to mentors and keep up with your reading and training as it’s the only way to stay ahead as a tax professional. Only when you have given it your best shot can you change direction in your career with no regrets.
The Front Office Route
When I left University I wanted to be a trader. I am not sure why, I think it was the assumption that one could make a lot of money very quickly, that no exams were involved and that it was an exciting lifestyle. Anyway, it turned out I was not good enough so instead I went to Andersen after graduating.
Some tax professionals start their career completely focussed on Financial Services. They want to end up in an investment bank and working at a Big 4 Firm is simply a route to get there. Front Office Tax Jobs do not come up that often but they are perceived as very attractive when they do. They tend to be open to both lawyers and accountants and offer that first move into front office structuring work.
The Non-Exec Route
Historically, the holy grail for a tax professional has always been partnership. When I was at Andersen the culture was openly described as ‘up or out’. This attitude has largely disappeared now, but for those who do achieve partnership there are often strict rules in place regarding their retirement age. This tends to result in tax partners leaving their Firm in their mid to late 50s and wondering what to do next.
One option that is common, especially in the US, is to join the board of your former clients as a non-exec director. The deep understanding you have of the client’s affairs means that you can continue to advise but do so in a wholly independent capacity. Perhaps more importantly, you step back from a tax role and immediately move into a consultancy role that is broader and more commercial.
The Client Relationship Route
Anyone who has worked in tax in a professional services environment (or indeed within a group tax function) has dealt with clients. Irrespective of the nature of the advice you have given, you will have learnt a huge amount in terms of how to operate within a business environment and how to communicate with your clients.
This experience can be used as a platform to launch a new career. So private client tax specialists can look at opportunities in private banking, where they are the primary contact with the client. At more senior levels they might become the head of a single family office, advising the Principal on a wide range of commercial and personal issues and managing both internal staff and external consultants.
Another option that tax professionals choose is to move into recruitment . Most of the specialist tax recruiters in the UK and US started off life as tax professionals. The mentality of looking after clients really well, combined with an in-depth understanding of the tax profession, means that they can seamlessly make the transition into headhunting. This move can in turn lead to other commercial activities. In my case I moved from tax into recruitment and then onto job boards, online publishing and other e-commerce platforms.
There is life after tax. There are undoubtedly some risks in leaving the profession behind, but this should not deter anyone who is committed to broadening their experience. Every tax professional should be confident that their overall skill-set and commercial nous is much greater than the label ‘tax specialist’ might suggest.
This article was written by Chris Bale, CEO of etaxjobs