Finding employees is also becoming increasingly difficult for tax offices and auditors.
(Photo: Imago)
Cologne They shouldn’t be available until the end of October. Then the deadline was pushed back to the end of January. But even by January 31, only 70 percent of the property tax returns requested had been received by the tax offices in North Rhine-Westphalia. The situation is similar in other federal states, with around a third of property and land owners defaulting.
The real estate tax reform law introduced by the federal government in 2019 is actually intended to make the taxation of real estate easier and fairer from 2025. Instead of using outdated standard values, calculations will in future be based on real value development. For the time being, however, the new regulation means additional work. The tax office requested data that many owners did not have and that had to be requested from the authorities first.
At the end of January, the Federal Chamber of Tax Advisors called for the deadline to be extended again. This call was heard only in Bavaria. Law firms groan under the additional expense. With the deadline approaching, numerous clients had sought out a tax consultancy for the first time because they were overwhelmed, the Chamber said.
A study by the Hamburg institute SWI Finance confirms that orders are piling up in law firms. On behalf of the Handelsblatt, it surveyed almost 5,000 tax consultants and auditors online about the challenges facing the industry. 88 percent of law firms state that they are currently very heavily or heavily burdened. And about 70 percent name the implementation of the property tax reform as a factor that has particularly increased the workload. The fears from the previous year have thus been fulfilled.
As early as 2022, the survey participants had named the forthcoming reform as a major challenge. The problem: The rush to the law firms does not end once the declarations have been submitted. “Objections and the review of notifications will remain highly relevant for at least the next two years,” says SWI Managing Director Marcus Schad
threaten fines
In general, around 70 percent of the participants are of the opinion that German tax law is becoming more and more complicated. “Despite other announcements from politicians, there is no indication of a trend reversal,” says Schad. Only 24 percent believe that they can advise their clients with legal certainty in all situations. Frequent changes in the law are particularly stressful – many tax consultants shimmy from advanced training to advanced training.
57 percent of respondents are also of the opinion that the tax authorities are outsourcing more and more activities to taxpayers, such as the tedious search for data for property tax. The impending fines for late submission of tax returns increase the time pressure. “This leads to stress among employees, managers and also in dealing with clients that can hardly be controlled,” says Schad.
Perspective and know-how are therefore required. In the study, SWI also identified the best tax consultants and auditors in Germany. To do this, the participants had to answer questions about their specialist areas. Those who achieved a particularly high number of points made it onto the leaderboard. 605 tax consulting firms and 113 auditing firms received awards.
Small law firms that are not up to the task are increasingly giving up, which increases the number of mandates and the workload for those who remain. These must increasingly reject mandates and even part with existing mandates.
Recruiting new employees is the biggest challenge
About every tenth law firm plans to do this in the future. At the same time, the increasing demands make it difficult to find suitable personnel. “The pool of well-trained employees is getting smaller and smaller in relation to demand,” says Schad. As in the previous year, the survey shows that recruiting new employees is currently by far the greatest challenge. More than 90 percent of those surveyed rate this as crucial for the future success of their law firm.
The focus is on the search for qualified young people – because that is proving to be particularly difficult. A study by the management consultancy Haufe is dedicated to Generation Z, i.e. today’s young professionals.
In August 2022, the authors surveyed young people who, through training or studies, would be predestined for a job in tax consulting. Only 18 percent stated that they could imagine working in the industry. According to one result of the study, tax advice is perceived by many as monotonous and not very creative, but at the same time complex. The professional field can score points with job security alone.
The Haufe authors conclude that law firms need to work on the image of the industry. It is about conveying the versatility of the increasingly digital professional field, for example via the preferred channels of Generation Z, i.e. above all social networks.
In addition, companies would have to offer more internships in order to provide insights into everyday working life. “The tax consulting professions are perceived much worse than they actually are,” the authors judge. Despite all the challenges, 82 percent of law firms in the SWI survey rated their economic situation as positive. However, only 64 percent expect growth – a year earlier it was 72 percent.
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