Managing the Relationship With External Tax Advisers

Almost every business with significant tax affairs uses external tax advisers, and managing that relationship well is an important part of the in-house tax manager’s role — or, in businesses without an in-house tax function, the Financial Controller’s. External advisers bring specialist expertise that the business does not have in-house, on complex matters, on planning, on areas requiring deep technical knowledge, and on the assurance that the tax position is sound. But the value the business gets from its advisers depends heavily on how the relationship is managed: a well-managed relationship delivers genuine value at a reasonable cost, while a poorly-managed one can mean paying for advice the business does not need, failing to get the value from the advice it does receive, or abdicating to the advisers responsibilities that should remain in-house. Managing the adviser relationship well is therefore a genuine skill that materially affects the value the business gets from its tax advisers.

This guide is written for in-house tax managers and finance professionals who manage the relationship with external tax advisers and want to do it well. It covers what external advisers are for and where they add value, the principle of owning the relationship rather than abdicating to it, how to brief and use advisers effectively, how to manage the cost and the value, and the common pitfalls in the adviser relationship. The aim is the practical understanding needed to get genuine value from external tax advisers while keeping the right responsibilities in-house, which is one of the more valuable contributions a tax manager makes to the business’s tax affairs and its tax costs.

What External Tax Advisers Are For

Understanding what external tax advisers are for is the foundation of using them well, because the value they add lies in specific areas rather than across the board. External advisers bring specialist expertise that the business does not have or need to have in-house — deep technical knowledge of complex or specialist areas, experience of matters the business encounters only occasionally, and the breadth that comes from advising many businesses. They add value on the complex transactions and situations that require this specialist expertise, on the planning that benefits from their knowledge and experience, on the areas of genuine technical difficulty where their depth is needed, and on the assurance that a tax position is sound, which their expertise and independence provide.

What external advisers are generally not for is the routine compliance and the day-to-day tax management that the business can and should handle in-house, where using expensive external advisers for what the business can do itself is poor value. The value of external advisers lies in their specialist expertise applied to the matters that genuinely need it, not in outsourcing the routine. Understanding this — that advisers add value on the complex, the specialist, the occasional, and the assurance, rather than on the routine the business can handle — is the foundation of using them well, because it allows the business to use the advisers for what they are genuinely good for while handling the routine in-house. The tax manager who understands what advisers are for uses them appropriately, getting their value on the matters that need it while not paying for what the business can do itself, which is the basis of getting good value from the adviser relationship.

Owning the Relationship, Not Abdicating to It

A central principle in managing external tax advisers is that the business should own its tax affairs and the relationship, using the advisers as expert support, rather than abdicating its tax affairs to the advisers. This distinction matters greatly. A business that owns its tax affairs — that understands its tax position, manages the relationship actively, directs the advisers, and retains responsibility — uses the advisers as a resource while keeping control; a business that abdicates to the advisers — that hands over its tax affairs without understanding or oversight, and relies on the advisers without engaging — loses control, often pays for more than it needs, and may not get the value it should. Owning the relationship is the posture that gets genuine value from advisers.

Owning the relationship means the in-house tax manager or finance function understands the business’s tax position and engages with the advisers’ work, rather than simply receiving and accepting it. It means directing the advisers — defining what is needed, briefing them clearly, and managing what they do — rather than letting the advisers define the scope. It means retaining the responsibility for the business’s tax affairs, using the advisers as expert input to decisions the business owns, rather than transferring the responsibility. The in-house tax manager who owns the relationship this way — understanding, engaging, directing, retaining responsibility — gets genuine value from the advisers while keeping control; one who abdicates loses control and value. This principle of owning the relationship rather than abdicating to it is fundamental to managing external tax advisers well, and it is the posture that distinguishes a business that uses advisers effectively from one that is used by them.

Briefing and Using Advisers Effectively

Getting value from external advisers depends on briefing and using them effectively, and this is a practical skill that materially affects the value and the cost. Effective briefing means defining clearly what the business needs from the adviser — the specific question or matter, the scope of the work, the output required — so that the adviser addresses the genuine need efficiently rather than ranging more widely than necessary. A clear, well-defined brief gets a focused, efficient response; a vague brief gets a broad, expensive response that may not address the genuine need. The in-house tax manager who briefs advisers clearly gets better value than one who briefs vaguely.

Using advisers effectively also means providing them with the information they need to do the work efficiently, engaging with their work to ensure it addresses the need, and managing the scope so that the work stays focused on what is required rather than expanding. It means using the advisers for their expertise on the matters that need it, while handling in-house what the business can do, so that the advisers’ expensive time goes to where it adds value. And it means challenging and engaging with the advisers’ work rather than simply accepting it, both to ensure it is sound and to retain the understanding that owning the relationship requires. The in-house tax manager who uses advisers effectively — briefing clearly, providing the information, managing the scope, engaging with the work — gets focused, valuable, efficient advice; one who uses them ineffectively gets broad, expensive, less useful work. Briefing and using advisers effectively is a practical skill that directly affects the value the business gets from its advisers, and developing it is part of managing the relationship well.

Managing the Cost and the Value

External tax advice can be expensive, and managing the cost while getting the value is part of managing the relationship well. The goal is not simply to minimise the adviser cost, which would mean forgoing valuable advice, but to get genuine value for the cost — ensuring the business pays for advice that adds value and not for advice it does not need. This requires using the advisers for the matters that genuinely need their expertise while handling the routine in-house, briefing them efficiently so the work is focused, managing the scope so it does not expand unnecessarily, and ensuring the advice received is actually used and valuable. The in-house tax manager who manages the cost and value this way gets good value from the adviser spend.

Managing the cost and value also involves the commercial management of the relationship — understanding the fees, agreeing the basis for the work, and ensuring the cost is proportionate to the value, much as any professional service relationship is managed. It may involve reviewing whether the business is getting good value from its advisers, whether the work could be done more efficiently or partly in-house, and whether the adviser relationship is delivering. The in-house tax manager who manages the cost and value actively — getting genuine value for the spend, managing the cost without forgoing valuable advice, reviewing the value the relationship delivers — ensures the business gets good value from its advisers; one who manages it passively may pay for more than the business needs or fails to get the value it should. Managing the cost and the value is part of the commercial side of the adviser relationship, and doing it well is part of the in-house tax manager’s contribution to the business’s tax costs and the value it gets from its advisers.

The Common Pitfalls

The adviser relationship has recognisable pitfalls, and an in-house tax manager who knows them can avoid them. The most fundamental is abdication — handing the business’s tax affairs to the advisers without understanding, engagement or oversight, which loses control, often costs more than necessary, and may not deliver the value it should. The remedy is owning the relationship, as discussed above. A second pitfall is the poorly-briefed engagement — vague briefs that produce broad, expensive, unfocused work that may not address the genuine need. The remedy is clear, well-defined briefing.

A third pitfall is the scope creep — adviser work that expands beyond what was needed, increasing the cost without proportionate value. The remedy is managing the scope actively. A fourth is using expensive advisers for routine work the business could do in-house, which is poor value. The remedy is using advisers for their specialist value and handling the routine in-house. A fifth is the uncritical acceptance of adviser work — accepting the advice without engaging or challenging, which both risks accepting work that is not sound and loses the understanding that owning the relationship requires. The remedy is engaging with and challenging the advisers’ work. And a sixth is the failure to manage the cost and value, paying for advice without ensuring it delivers value. The remedy is the active management of cost and value. The in-house tax manager who avoids these pitfalls — owning the relationship, briefing clearly, managing the scope, using advisers for their value, engaging with the work, managing the cost — gets genuine value from external tax advisers; one who falls into them gets poor value and lost control. Avoiding the pitfalls is what managing the adviser relationship well requires, and it materially affects the value the business gets from its tax advisers, which is part of the in-house tax manager’s contribution.

Getting Value From the Adviser Relationship

A well-managed relationship with external tax advisers delivers more than the resolution of specific questions; it provides ongoing access to expertise, insight into developments, and a partner who understands the business and can be relied upon when significant tax matters arise. The in-house tax manager who builds a genuine working relationship with the advisers — rather than treating them purely as a resource to be called on transactionally — gets more value, because an adviser who knows the business well can give better, more tailored advice and can flag developments and opportunities the business might otherwise miss. The relationship is an asset, and cultivating it pays off in the quality and the relevance of the advice.

Getting value from the relationship also means using the advisers well — briefing them clearly so they can give precise advice, engaging them on the matters where their expertise genuinely adds value rather than on routine matters the in-house team can handle, and being an informed, engaged client who can challenge and apply the advice rather than a passive recipient. The in-house tax manager who uses the advisers this way — building the relationship, briefing them well, engaging them on the right matters, applying the advice with judgement — extracts genuine value from the external expertise; one who uses them poorly, or transactionally, gets less. Managing the adviser relationship well is therefore not just about controlling cost but about maximising the value the external expertise brings to the business, and the in-house tax manager who masters this gets the best from the combination of in-house knowledge and external specialism that effective tax management in a business of any complexity requires.