Hedge funds and taxes? Good news for accountants
If HM Revenue & Customs has its way and hedge fund managers are forced to pay hundreds of millions of pounds in tax, there may be new opportunities arising for accountants who know their way around both the tax and hedge fund worlds. Matt Davis finds out more.
Excessive profits?
The combined tax and excise authority is currently conducting an investigation into whether firms channelled excessive profits to offshore tax jurisdictions. It is believed that they are seeking to reclaim as much as £1bn from hedge fund managers.
Simon Howes, manager of Hays Banking's hedge funds and finance division, says: “This is a serious problem, particularly with the large sums of money that are involved. The sheer number of funds in this industry, plus the fact that taxable profit has been a grey area for a while now, means that both accounting firms and hedge funds will have to allocate specific focus on offshore tax and taxable profits.”
New opportunities
Although recruitment specialists do not expect the floodgates to open, they do expect hedge fund and private practice firms to allocate slightly more resources to this area. “Accountants that have a complete understanding of taxation, as well as accounting policies and operational practices within hedge funds, will be in high demand,” adds Howes.
Hedge fund firms will not initially want to hire the graduates from their ACA programmes. Instead, they are looking for seasoned tax managers who not only understand the intricacies of tax, but have a in-depth understanding of the accounting policies and operational practices within hedge funds.
“Hedge funds will focus on hiring qualified tax managers and senior managers from practice, as they will need to have the relevant experience and right level of exposure to manage this sector,” says Howes. “Due to supply shortages though, there will be a subsequent demand for newly qualified ACAs, ideally with financial services experience, to be trained up in the hedge fund sector."
Money matters
As far as salaries are concerned, a tax manager with three to seven years' experience can expect between £60,000 and £80,000, while a senior tax manager could be looking at £80,000 to £120,000.
