Tax salary increases
- Tax accountants’ salaries rise 19.7% in 2011, outperforming overall accountancy salaries which rose only 2.1%
- Largest rises were for senior managers in financial services whose salaries increased by up to 25%
- Rise driven by passing of FATCA and growing desire among employers to increase tax efficiency
Accountants working in tax have seen their salaries rise more than seven times faster than the rest of the industry.
According to research by accountancy and finance recruiter Marks Sattin, tax accountants’ salaries have increased 19.7% in the last year, while salaries across the industry rose only 2.1% .
Dave Way, managing director of Marks Sattin said: “Tax has been one of the biggest areas for expansion in accountancy firms over the last year as well as among in-house employers as regulatory changes have put professionals with tax expertise front and centre. Taxation requirements on companies trading in the EU have become increasingly complex as the array of obligations, deductions and rates, as well as the requirements for completing intrasat returns and EC sales lists have grown. On top of this, the passing of FATCA has put the focus squarely on hiring professionals with a comprehensive knowledge of compliance and risk.
"Major financial institutions have started pushing hard to ensure they are as tax efficient as possible. For many employers, the value of the cost savings which can be generated by accountants with these skills has become clear. The rise of salaries in industry since the second quarter of 2011 has caused practice – especially the Big 4 – to improve their packages too. So successful has this policy been, many tax specialists have reversed the normal trend to move out of industry to take advantage of the excellent offers being made"
The highest salary uplift of all was for tax accountants in industry at senior manager level, who received a pay hike of up to 25% last year. This means senior managers saw their salaries rise more than ten times faster than the industry average. When adjusted for inflation, senior tax managers’ spending power has risen by 18.7%. Directors received a more modest rise of 8.7%, while middle and junior managers saw their pay rise by 12.7%. By contrast, financial controllers received salary rises of just 3.5% in the last year and core financial accounting salaries rose by 3.6%.
Dave Way continues: “Since the beginning of the year, senior managers with experience and a proven ability to lead growing teams have seen their salaries rocket up – faster than any other group in the accountancy industry, both in the UK & Ireland. The growth in demand has now trickled all the way to newly qualified accountants as demand is outstripping supply by a distance. This has led to some massive salary rises for tax specialists during the year. Especially in London, where the uplift for living in the capital can be as large as £20,000, tax accountants have had a year to savour”.
Industry performance
Although the average salary rise for accountants was much lower than that of tax specialists, the industry as a whole has seen relatively strong salary growth in 2011. According to the ONS’ latest figures, chartered accountants in the UK received an average salary increase of 2.1% this year. By contrast, lawyers’ salaries rose only 1.2% and average UK salaries went up by 1.4% .
Dave Way says: “Even though the average accountant’s salary has risen more slowly than inflation, a 2.1% rise during the year is a very strong performance relative to other professions and the rest of the country’s workforce as a whole. While accountants certainly suffered during the recession, companies are now increasingly focusing on growth. This means new roles are being created and employers are willing to offer large sums to fill them”.
Ireland
Marks Sattin’s research also shows Irish tax specialists have also enjoyed salary rises of 15.6% this year, with salaries for tax partners exceeding €150,000 and tax directors throughout the country now being able to access salaries above €100,000. This compares to a 3% fall across the professional services industry in Ireland, in which salaries have dropped to an average of €38,500 from €40,500 in the third quarter of 2010.
Clinton Donkin, manager of professional services and taxation at Marks Sattin in Dublin said: “The adoption in January of the OECD Transfer Pricing Guidelines has put TP specialists under the spotlight and employers are fighting for those with expertise in the new regime. This has boosted salaries and job creation at every level of seniority, especially among the Big 4 firms, who are taking the lead in developing their transfer pricing expertise”.
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