How to specialise in VAT at your accountancy practice

Accountants that work within general practice might be tempted to specialise. One route forward is indirect taxes, such as VAT.

VAT remains one of the most dynamic areas of taxation. As Making Tax Digital and the coronavirus (COVID-19) measures taken by the government recently demonstrate, VAT is never far from the minds of legislators – and is therefore central to many UK businesses.

Businesses of all kinds and sizes will always need help getting VAT right, and sometimes this requires extremely high-level knowledge and experience not commonly found among general practitioners.

But achieving a VAT specialism can be difficult if you aim for certification via qualifications.

It requires significant (and expensive) study, and that’s followed by uncompromisingly tough examinations that can be more about law than number crunching and traditional accounting practices.

It’s been said it requires a mind suited to academic study, and favours those who already have a strong working background within VAT.

This is both good and bad.

The difficulty level creates attrition and in November 2019, the pass rate for the Domestic Indirect Taxation Advanced Technical exam that’s part of the Chartered Tax Adviser qualification was just 26%. Success is not guaranteed even for experienced professionals.

However, those that do succeed and become qualified are therefore at a premium – and this can be reflected in significantly higher earning potential and a more engaging working life.

Why accountants want to specialise in VAT

Anybody who believes a VAT qualification will enhance their prospects in general practice is perhaps misguided.

Those thinking of a VAT specialism should start by considering their career path and where they hope to end up.

After all, VAT compliance for most clients within an average practice is straightforward, especially if the client uses one of the VAT schemes.

Less well-trodden areas such as VAT for group companies, the Capital Goods Scheme and VAT applied to property might require specialist knowledge, but there’s a strong chance an answer might be found via a little researching (e.g. a quick Google session).

In other words, a VAT qualification is perhaps overkill if you simply want to get a better working knowledge of VAT, or even if you wish to enhance your career prospects while remaining in general practice.

Private study might be a better route forward, accompanied by a demonstrable history of tackling VAT-related issues for clients.

Working as a VAT specialist

VAT specialisms are more likely to lead to a career in specialist VAT consultancy or employment with one of the larger firms that take on correspondingly larger clients.

Sometimes a large business may employ its own VAT specialists.

A lot of your work is likely to involve advising on VAT across international borders (especially following Brexit), and as such is often accompanied by a specialisms in customs, cross-border declarations, and business supply chains.

Working as a VAT specialist can lead to legal work representing clients at tribunals, and in dispute resolution.

Specialisms in VAT for property, charities, healthcare, finance and startup businesses are also often desirable.

In addition, there are training opportunities for helping business owners and managers understand their VAT requirements. It’s been said that a VAT specialist has to be a people person because they spend a lot of time explaining esoteric concepts to laypeople.

In short, a VAT specialism can take you a long way from general practice and often takes you away from smaller businesses too.

This might be a good or bad outcome, depending on your career desires.

VAT specialism qualification requirements

The gold standard for anybody desiring a VAT specialism is the Chartered Tax Adviser (CTA) qualification from the Chartered Institute of Taxation (CIOT), which it refers to as “the highest level tax qualification in the UK”.

This grants professional membership of the CIOT.

There are various routes to take through the qualification framework, and not all relate to VAT. You’ll need three years’ demonstrable relevant and recent professional tax experience to become a member of the CIOT, plus two professional sponsors who’ve known you for at least two years.

No actual prior law or accountancy qualifications are necessary to attempt CTA qualification, but the CIOT suggests those without qualifications begin by following the Tax Pathway – a combined qualification route between the Association of Taxation Technicians (ATT) and the CIOT.

For a VAT specialism within the CTA, the goal is to pass the relevant Advanced Technical and Application and Professional Skills components, where it’s possible to take exams entitled Domestic Indirection Taxation, Cross-Border Indirect Taxation, and VAT & Other Indirect Taxes.

A word of warning: those who’ve become CTA qualified say the indirect taxation-related exams are the hardest to pass in comparison to other CTA exams.

Costs for CTA qualifications – and what to expect

Costs for those attempting a CTA membership in 2020 include:

• A student registration fee of £220
• Purchase of the latest editions of manuals including Essential Law for Tax Practitioners, Professional Responsibilities and Ethics for Tax Practitioners, and Principles of Accounting (all £45 each)
• Several examination fees ranging from £180 to £225.

Of course, you’ll also need to purchase course provision and training, which for working people is typically spread across 24 to 36 months.

In terms of cost, training for all the CTA qualification exams – including Awareness, Computer Based Exams, Application and Professional Skills, and Advanced Technical VAT-related modules – cost around £8,000 with a provider when we enquired in July 2020.

CTA examinations are in May and November each year, although coronavirus disruption in 2020 has led to adjusted schedules so you should check ahead of time.

Take a look at the CTA prospectus and syllabus. You can also take a look at past papers and suggested answers to get a flavour of what the exams are likely to entail.

It isn’t just an almost encyclopaedic knowledge of VAT legislation and practice that’s required. You’ll also need to know about relevant case law and be able to apply it to specific examples.

Conclusion on specialising in VAT

If you’re hoping to move your career into a VAT specialism, the first step should be to take on as much VAT-related work as possible within your current position.

Learn not only where the limit of your existing knowledge is, but also try to discover what clients want and need.

If VAT compliance is simply something that interests you, or for which you find you have an ability, it might be already possible to achieve career satisfaction without the need to undertake training that those who do say erodes both social lives and financial resources for a year or two (although some firms offer support for training – it’s worth enquiring).

But there’s little doubt that becoming a qualified VAT specialist can be inspiring and rewarding, and places you among the elite of the profession.

Many people use it as a springboard to launch successful practices of their own, or to achieve high-powered positions within large firms.

Try to find friendly individuals who’ve achieved the CTA qualification in order to determine how it affected their careers.

If nothing else, they’ll be able to tell you about any difficulties they encountered, putting you in the best possible starting position.