Key Trends and Insights for In-House Tax Teams in 2025

As we enter 2025, the landscape for in-house tax teams is evolving rapidly, driven by advancements in technology, regulatory developments, and shifting hiring dynamics. Here are the key in-house tax trends 2025, along with our insights for the year ahead:

UK Corporate Tax Trends

Technological advancements and the growing integration and reliance on AI are reshaping the corporate tax landscape. These changes are helping to bolster the case for handling more compliance work in-house, and reducing the reliance on external consulting firms. We see this trend continuing, meaning these external firms reducing their rates for compliance services.

Impact on External Compliance Teams:

1. Price Pressure to Cause a Service Shift – As in-house teams handle more compliance, external firms will need to lower rates or pivot to offer high-value advisory services.
2. Tech-Driven Adaptation – Firms who don’t work with AI and automation will ultimately lose out, left behind by those offering streamlined, data-led compliance solutions.
3. Specialisation & Consolidation – Many businesses are shifting towards a definable niche, to better showcase their expertise (e.g., tax strategy, disputes), which may lead to potential mergers among smaller firms.

Impact on Businesses Seeking Compliance Services:

1. Lower Costs & More Choice – Increased competition may lead to reduced compliance fees and more tailored service models.
2. Stronger In-House Capabilities – Companies are investing in automation and up-skilling their teams, with the aim of reducing reliance on external providers and being able to offer better customer service, and retention in return.
3. Selective Outsourcing – Their is still a need for outsourcing and many businesses may still engage external experts for complex tax matters, whilst keeping routine compliance in-house.

VAT

The higher education sector continues to experience disruption, particularly due to the VAT levy on private schools. This has created additional workload and led some institutions to hire their first-ever tax specialists. While there are no major changes in other sectors, the recent Barclays v HMRC case highlights significant savings opportunities for multinationals through proper engagement in VAT grouping. This is a trend worth monitoring closely in 2025.

1. Real-Time VAT Reporting & Data Automation – With tax authorities pushing for real-time VAT compliance, in-house teams are having to adopt automated reporting systems to reduce errors and improve efficiency. This shift is causing a move away from a reliance on external advisors for routine VAT filings.
2. ESG & VAT Compliance – Growing ESG tax incentives and VAT reliefs mean businesses must ensure compliance with sustainability-linked VAT regulations. In-house tax teams are taking a proactive role in managing VAT obligations, again, reducing the need for external advisory input.

These trends emphasise the need for self-sufficiency in VAT compliance, reinforcing the move towards stronger in-house tax capabilities during 2025.

R&D Tax Trends, Insights and Patent Box

Ongoing government support for R&D tax relief and the Patent Box regime underscores the importance of companies fully leveraging these savings opportunities. However, criticism of some R&D advisory firms highlights the need for careful execution and governance in this area.

1. In-House Control Over R&D Tax Claims – Companies are shifting R&D tax relief claims in-house to improve governance and mitigate risks linked to third-party advisory firms. This should ensure greater accuracy, compliance, and alignment with evolving HMRC scrutiny.
2. Patent Box & IP Tax Strategy Integration – Businesses are embedding Patent Box planning within in-house tax functions to maximise their tax savings on intellectual property (IP). By aligning IP strategy with tax compliance, companies reduce reliance on external specialists and gain long-term tax efficiency.

Transfer Pricing: The Rise of Multi-Skilled In-House Roles

With ongoing efforts to simplify transfer pricing regulations, companies are reducing reliance on dedicated external specialists. Instead, many in-house tax teams are integrating dual expertise models, which combine transfer pricing with indirect tax knowledge to optimise compliance and efficiency.

This shift reflects a broader trend towards versatile in-house tax functions, reducing costs and increasing agility within a changing regulatory environment.

Hiring Climate for In-House Tax Teams

• Talent Acquisition Trends: More companies are turning to in-house talent acquisition teams to hire tax staff as a cost-saving measure. While this approach can extend the time-to-hire, it may not always be a critical issue. Companies partnering with tax-specific recruitment agencies may benefit from reduced competition for top-tier candidates.
• Permanent Hires: Salary growth continues but has slowed due to a quieter market overall. The talent pool remains tight, with fewer applicants per role. Some top talent is choosing to stay in their current roles, particularly where flexible working arrangements are in place. However, the market is gradually shifting toward more in-office setups.
• Temporary Hires: The market for day-rate contractors remains weak, with limited roles available. Companies are increasingly opting for fixed-term contracts (FTCs) instead. For hiring teams able to offer competitive daily rates, there is an opportunity to secure high-quality talent at reduced costs.

Key Takeaways for In-house Tax Teams in 2025

• Leverage technological advancements to bring more compliance work in-house and reduce reliance on external firms.
• Keep an eye on VAT grouping opportunities for potential cost savings.
• Maximise benefits from R&D tax relief and Patent Box regimes while ensuring robust governance.
• Adapt hiring strategies to the evolving talent acquisition landscape, balancing in-house efforts with agency partnerships.
• Take advantage of the current temporary hiring market to secure excellent talent at competitive rates.

By staying ahead of these trends, in-house tax teams can position themselves to navigate the challenges and seize the opportunities that 2025 brings.

Contact us today to streamline and elevate your tax team hiring process.