One minute with Jim Marshall, senior vice president for tax, Pearson plc.
How do you see the in-house tax function evolving over the next five to ten years?
Increasingly, tax should position itself as a business partner. The days are over when it was enough for the tax department to concentrate on little more than CFC avoidance financing structures from its Ivory Tower. We need to be communicating with senior executives and the board on risk management. This will mean that tax skills alone will not be enough; they will have to be aligned with communication skills, business awareness and strategic thinking. In addition, changes in information technology and data retrieval will mean that tax departments will need to invest in new technologies and processes, while spending more time on process improvements and change management. Another interesting development will be the move of increasing amounts of tax work to shared service centres, both offshore and near shore.
How do you select your advisers?
Tax advisers in the big 4 and magic circle firms are facing some of the same challenges as in-house functions. The role is now changing from one of technical tax specialist to all-round business adviser. Tax departments need advisers who understand the broader agenda, including effective board engagement, wider perspective on tax strategy and impact on business. While we obviously look for ‘value’ from our advisers, we are also looking at those who have such qualities and who are thinking about the bigger picture.
What’s the biggest hurdle you face in your role?
Right now, my biggest challenge is to determine a robust long term tax strategy in the context of a fundamental change in the tax environment, while the business itself is in the process of rapid and fundamental change. I think boards have, in the past, heard tax directors raising concerns about the impact of new legislation but then delivering a solution to deal with it. I have spent a lot of time persuading our board that BEPS brings such a material and wide ranging change in the tax landscape, probably the most fundamental for nearly 100 years, that there are no easy solutions.
What are you doing to prepare for BEPS?
Attending a lot of seminars and workshops! Obviously, we are trying to understand what the proposed changes may mean for Pearson and which countries will enact what changes and when that will be. The challenge then is to explain the impact to the board and senior management as clearly as possible. CBCR means new processes are required to capture data. Where appropriate, we have made representations on discussion drafts.
If you could make one change to UK tax law, what would it be?
I think the changes to UK tax law over the past ten years have significantly improved the UK regime. I fear that the UK government’s reaction to BEPS, in particular legislating before other countries, will reverse this trend. This will make the UK regime unattractive, inhibiting investment in the UK. So, I would not so much make a change but rather deliver a request to consider the wide ranging consequences of BEPS. The Corporate Tax Roadmap produced by the last government was a great innovation and I look forward to seeing the update in the next few months.
You might not know this about me but…
I’m a trustee and treasurer of Magic Bus, a charity that supports the poorest children in the slums and rural areas of India. We use a sports based mentoring system to steer children towards a better life with better awareness, better life skills and better opportunities in their journey from childhood to livelihood. There are currently over 400,000 children in our programme. I’m also a huge music fan and try to get to 15 to 20 gigs per year – everything from Bob Dylan to Rhiannon Giddens to John Grant (look him up, he’s on YouTube!)
One minute with Jim Marshall, senior vice president for tax, Pearson plc.
How do you see the in-house tax function evolving over the next five to ten years?
Increasingly, tax should position itself as a business partner. The days are over when it was enough for the tax department to concentrate on little more than CFC avoidance financing structures from its Ivory Tower. We need to be communicating with senior executives and the board on risk management. This will mean that tax skills alone will not be enough; they will have to be aligned with communication skills, business awareness and strategic thinking. In addition, changes in information technology and data retrieval will mean that tax departments will need to invest in new technologies and processes, while spending more time on process improvements and change management. Another interesting development will be the move of increasing amounts of tax work to shared service centres, both offshore and near shore.
How do you select your advisers?
Tax advisers in the big 4 and magic circle firms are facing some of the same challenges as in-house functions. The role is now changing from one of technical tax specialist to all-round business adviser. Tax departments need advisers who understand the broader agenda, including effective board engagement, wider perspective on tax strategy and impact on business. While we obviously look for ‘value’ from our advisers, we are also looking at those who have such qualities and who are thinking about the bigger picture.
What’s the biggest hurdle you face in your role?
Right now, my biggest challenge is to determine a robust long term tax strategy in the context of a fundamental change in the tax environment, while the business itself is in the process of rapid and fundamental change. I think boards have, in the past, heard tax directors raising concerns about the impact of new legislation but then delivering a solution to deal with it. I have spent a lot of time persuading our board that BEPS brings such a material and wide ranging change in the tax landscape, probably the most fundamental for nearly 100 years, that there are no easy solutions.
What are you doing to prepare for BEPS?
Attending a lot of seminars and workshops! Obviously, we are trying to understand what the proposed changes may mean for Pearson and which countries will enact what changes and when that will be. The challenge then is to explain the impact to the board and senior management as clearly as possible. CBCR means new processes are required to capture data. Where appropriate, we have made representations on discussion drafts.
If you could make one change to UK tax law, what would it be?
I think the changes to UK tax law over the past ten years have significantly improved the UK regime. I fear that the UK government’s reaction to BEPS, in particular legislating before other countries, will reverse this trend. This will make the UK regime unattractive, inhibiting investment in the UK. So, I would not so much make a change but rather deliver a request to consider the wide ranging consequences of BEPS. The Corporate Tax Roadmap produced by the last government was a great innovation and I look forward to seeing the update in the next few months.
You might not know this about me but…
I’m a trustee and treasurer of Magic Bus, a charity that supports the poorest children in the slums and rural areas of India. We use a sports based mentoring system to steer children towards a better life with better awareness, better life skills and better opportunities in their journey from childhood to livelihood. There are currently over 400,000 children in our programme. I’m also a huge music fan and try to get to 15 to 20 gigs per year – everything from Bob Dylan to Rhiannon Giddens to John Grant (look him up, he’s on YouTube!)
