Don't hire a tax lead to file VAT returns

There comes a point where a growing business needs tax expertise of its own. The mistake isn't hiring too early or too late; it's hiring the right person and then using them as a processor.

Sooner or later a growing business asks: do we need our own tax person? It usually surfaces when adviser fees keep climbing, when tax starts eating the finance director's evenings, or when a decision goes the wrong way because nobody with a tax lens was in the room.

It's the right question, but only the start of the conversation. Most people skip straight to the money (what's the budget, and how much could we save by bringing tax in-house?) when the smarter first move is to ask what you actually want from the role. 

Why you might need a tax person 

It's complexity, not volume, that should drive the decision to hire in-house tax support. The signals usually arrive together:

• tax is taking up real finance-leadership time, reactively
• decisions (a deal, overseas expansion, an incentive plan) are being made without tax input, and surfacing later as surprises

you're moving into new territory: overseas people or entities, share schemes, meaningful debt, or the approach to the larger-business thresholds

adviser fees keep rising for work a capable in-house coordinator could manage If two or three ring true, it's probably time.

For most private businesses that point falls somewhere between £50 million and £250 million of turnover. 

What good looks like 

Before you hire, decide which tax responsibilities should sit where. The split is flexible, but for a growing business it generally looks like this: judgement and ownership in-house; specialist depth and strategic insight from external advisers; and routine processing either outsourced or automated in-house. 

Expect more from the role than throughput. A good tax lead earns their keep in judgement, in the decisions they shape, not the returns they file. They should: 

• own the overview: know, at any point, where the risks and the opportunities sit across the whole position, rather than just clear the next deadline 
• bring tax in early: into decisions while they're still being shaped, not after they've been made 
• orchestrate rather than do everything: know which work needs an external specialist, buy that help well and manage it 
• build the quiet infrastructure: clean data and documentation kept as you go, so value isn't lost later for want of evidence 
• look forward: understand how your obligations will change as the business grows, and make sure it's ready for the key transactions ahead 

A good tax lead isn't there to get rid of your advisers. They're there to know when to bring one in, and to get more out of them when they do. The aim isn't to pull everything in-house; it's to put someone in charge of the whole picture. 

The trap many businesses fall into 

It's a common one. You hire an experienced tax manager, and within a year they're filling their week with compliance: VAT returns, corporation tax filings, or even worse, collating information for your outsourcing provider. You've put a senior judgement-maker on processing. 

It happens the other way round too: a business outsources everything and leaves nobody inside who really owns the tax function. The external work still arrives, but no one joins it up or acts on it. And it's easy to assume you're covered because tax is outsourced, when in reality that engagement is narrowly focused on compliance. 

Getting it right 

Before you write the job spec, challenge the default of using the role to insource work. The best-value model is often an internal team that leans on outsourcing and automation for the routine, and external advisers for the strategic depth. Ownership inside, efficiency underneath, specialist reach when it matters. 

Then make the role count. Give them a seat at the decisions, not just the deadlines. Let them spend money on specialist advice when it's the right call. Get them engaged in the commercial side of the business. And measure them on what they actually change: the value found, the surprises avoided, not whether returns are filed on time. 

Your first tax hire isn't about doing more tax in-house. It's about making better tax decisions, earlier, and having someone who understands tax embedded in the business, in the room when decisions are made, and close enough to connect the tax to the commercial reality in a way an outside provider can't. That's where the value is, and why the right person pays for themselves many times over. 

Acting now 

The opportunity for a well-run tax function has never been greater. Automation and AI are making it possible to strip routine compliance work down to almost nothing, freeing up budget and headspace for judgement and strategy. The same technology is now in the hands of tax authorities, who are using it to scrutinise businesses that would previously have received only a cursory glance. Get this right and your tax function becomes faster, leaner and better protected. Leave it too long and you risk paying over the odds for processing while facing more regulatory scrutiny than ever before. 

How we can help 

Automation and AI are shifting what a tax function can do. Yet many in-house tax teams are still focused on filing VAT returns and firefighting. 

We help you work out what's now possible, whether you're building a tax team from scratch or getting more from the one you already have. That might be automation that takes routine work off your team, so your budget buys judgement rather than processing. Or the forward-looking strategic depth that protects shareholder value and readies you for exit. 

The aim throughout is the same: helping you get the most value from what you spend. 

This article is general commentary and not advice. To discuss any of it, get in touch with Edward Murphy.