Consultants must offer practical advice to clients, say tax directors

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Consultants must offer practical advice to clients, say tax directors

‘Ivory tower’ advice is no longer good enough, say tax directors

Third-party advisors need to ensure their tax advice is practical and usable, rather than following ‘ivory tower’ theory, and ensure they do not make decisions for their clients, say tax directors.

Third-party advisors do offer a value to tax departments, but tax directors are using them more tactfully.

“Most tax departments don't really have a budget to let a third party advisor just go off and spin their wheels. Those days are gone,” said a global head of tax. “Now it's about using them strategically.”

To ensure advisors are not being used for small tasks, the global head of tax said she encourages her tax team to do their own research on a topic first. This will involve understanding the topic enough to be able to pose a question to the advisor by conveying what the tax professional is dealing with, what they think the answer is, and then ask then advisor if there is anything they are missing or if their interpretation is correct.

“Do some of that initial legwork for them,” the global head of tax said. “It helps us to save money.” 



Webinar: https://bit.ly/WIT-LINK



A more popular approach is business partnering, where the advisors take the time to understand the business, its needs and how the tax department likes to operate. Using this method, the global head of tax said she always challenges her advisors to ensure they give practical advice.

“I can't just deal with the theory. I don’t want ivory tower advice because that's not useful to me because, at the end of the day, we have to deal with our businesses, whether it's the CFO or another business division. I need something practical and I need a practical answer as well as the theoretical answer,” the global head of tax said.

However, while tax departments want answers from their advisors, some prefer to not have the decisions made for them.

“I always want to be the one to make a call on the risk,” said the global head of tax. “One pet peeve with third-party advisors is [having to ensure] that they do not make the decision for me. Tell me what my options are, tell me what the pros and cons are, but let me be the one to make the decision.”

Similarly, the managing director of tax at a private equity company said her previous experience as a tax advisor taught her how to use them more effectively and build a partnership.

“When I worked [as an advisor] clients would throw data over the wall and say, 'get me the answer,' but you could not make sense of the data because it was so unique to the client and you end up going back and forth so many times just to make sense of the information,” she explained.

So when moving to an in-house role, her moto became ‘let's make us successful’. “By 'us' I don’t mean the client versus the advisor, but all of us working together,” the managing director explained. However, she said it is still important to make sure the tax function is in control.

This focus on partnering has also changed the way some tax advisors operate too.

“For us, it's about getting more creative, looking at how we structure our fees, how we're having those conversations with clients, and thinking outside the box to see how we can do the work for you within your budgetary parameters,” said a tax partner from an international law firm.

“We're finding a lot [of the change in the way tax functions operate and view efficiencies] leads to conversations on, for example, how the tax department can get more freedom on fees, or how the service provider can deliver more value,” said the tax partner.

“As a business advisor, I need to know everything about a business and I need to know the pressure points,” she continued.

As tax departments change the way they operate, often with smaller budgets, tax advisors have to adapt to ensure they are offering a valuable service that complements the expertise within a tax function. Tax directors are quick to notice those advisors that give theoretical, rather than practical, advice and will find that they are being cut off by their clients who prefer a real-life approach.

more across site & shared bottom lb ros

More from across our site

AI-powered tax agents are likely to be the next big development in tax technology, says Russell Gammon of Tax Systems
FTI Consulting’s EMEA head of employment tax and reward tells ITR about celebrating diversity in the profession, his love of musicals, and what makes tax cool
Canadian Prime Minister Mark Carney and US President Donald Trump have agreed that the countries will look to conclude a deal by July 21, 2025
The firm’s lack of transparency regarding its tax leaks scandal should see the ban extended beyond June 30, senators Deborah O’Neill and Barbara Pocock tell ITR
Despite posing significant administrative hurdles, digital services taxes remain ‘the best way forward’ for emerging economies, says Neil Kelley, COO of Ascoria
A ‘joint understanding’ among G7 countries that ‘defends American interests’ is set to be announced, Scott Bessent claimed
The ‘big four’ firm’s inaugural annual report unveiled a sharp drop in profits for 2024; in other news, Baker McKenzie and Perkins Coie expanded their US tax benches
Representatives from the two countries focused on TP as they met this week to evaluate progress under a previously signed agreement – it is understood
The UK accountancy firm’s transfer pricing lead tells ITR about his expat lifestyle, taking risks, and what makes tax cool
Dolphin Drilling intends to discuss the final liability amount and manner of settlement with HM Revenue and Customs
Gift this article