What is tax compliance and what does a tax compliance professional do?

Tax compliance is the degree to which a taxpayer complies (or does not comply) with the tax rules of their country, for example by declaring income, filing a tax return, and paying the tax due in a timely manner. Tax compliance will either relate to corporate tax or personal tax.

Tax compliance analysts in the UK are responsible for ensuring that the financial information a company or individual submits to HMRC is accurate, complete and adheres to the tax compliance obligations set out by HMRC and the law. If they identify discrepancies in the financial information it is their responsibility to carry out further investigations to identify the extent and cause of the issue, propose remedies and to escalate as appropriate.

A tax compliance manager is more senior and manages a team of tax compliance analysts. They are the main contact for the clients or partners in a company and will additionally develop and implement strategies based on knowledge of tax compliance regulations, as well as reviewing work completed by their analyst team.

Key responsibilities

Responsibilities will vary, but examples include:

  • Collating and reviewing tax returns on behalf of a personal client or company.
  • Preparing annual tax returns and supporting financial statements on behalf a personal client or company.
  • Responsibility for identifying and mitigating risk for both personal and corporate clients.
  • Liaising with the tax authorities on behalf of the client to resolve any queries or issues arising in relation to tax returns.
  • Liaising with other internal and external advisors to ensure all tax submissions accurately reflect all transactions within tax reporting.

Why are they important?

As the focus on governance and regulation within industries increases, tax compliance has never been more important. Failure to comply with tax rules will not only incur financial penalties (and a possible increase in the tax charge) but it is also a serious business risk as can damage the taxpayer's reputation with the authorities and with the public.

Skills needed for this role

An appropriate professional qualification (such as the ACCA Qualification) is often required to pursue a career in tax compliance. Professionals must also have excellent numerical and problem-solving skills, as well as a strong attention to detail.

Strategic Professional Options examinations linked to this role

Advanced Taxation

Career opportunities presented by this role

With an increasingly complex tax system and wide ranging regulation, opportunities are plentiful. Career progression is also excellent - analysts can progress through a structured career to senior level roles.

Competencies

High level competencies required include:

  • Corporate business reporting

    A. Prepares financial statements, corporate financial and integrated reports for external stakeholders using appropriate technology.

    B. Leads effective decision making through analysing, evaluating and communicating performance and position of entities.

    C. Prepares financial statements for groups of entities using appropriate technologies.

    D. Monitors, critically evaluates, and advises on the relevant accounting standards, regulations, conceptual and financial reporting frameworks.

  • Stakeholder relationship management

    A. Positively develops relationships with internal and external stakeholders.

    B. Communicates and gains commitment from internal and external stakeholder.

    C. Uses emerging technologies to collaborate and communicate effectively with stakeholders.

    D. Applies professional and ethical judgement when engaging with stakeholders.

    E. Aligns organisational strategic objectives with stakeholder needs and manages expectations.

  • Taxation

    A. Communicates knowledge of the operation and scope of the tax system, obligations of taxpayers, and the implications of non-compliance and advises on tax planning.

    B. Advises ethically on strategic tax plans and computes the tax liabilities of individuals.

    C. Advises ethically on strategic tax plans and computes the corporation tax liabilities of individual companies and groups of companies.

    D. Explains and computes the effects of value added tax (VAT) / goods and services tax (GST) and indirect tax on incorporated and unincorporated businesses and advises appropriately.