By James Rodgers, Director - Tax

As of January 2025, the UK tax market is experiencing modest salary increases, influenced by economic conditions and sector-specific demands.

Over 50% of the candidates we have spoken to recently are expecting pay rises within the 2-8% range, which is broadly consistent with the previous year. Indeed, Willis Towers Watson’s Salary Budget Planning Report, stated that overall salary increase budgets are projected to average 3.9% in 2025, a slight decrease from 4.3% in 2024.

Above-average increases for some

However, some sectors are experiencing above average increases. Typically financial services, including investment services, PE and insurance, are likely to be experiencing higher increases, with some professionals enjoying over 21% raises, particularly at the Manager and Senior Manager/Associate Director levels.

Looking ahead, broader market commentary and 2025 forecasts suggest that the evolving tax function, with an increased emphasis on real-time reporting and technological integration, may lead to higher demand for skilled tax professionals. This demand is projected to drive salary increases of around 6-10% for senior positions in the tax sector.

However, it's important to note that some professional services firms have implemented cost-cutting measures due to challenging market conditions. For instance, EY announced lower salary increases and bonuses for its UK tax staff, with a 2.2% salary increase in 2024, down from 6% in 2023 and 10% in 2022 (as reported in the Financial Times).

In summary

While certain sectors within the UK tax market are experiencing modest salary increases, overall compensation trends are being influenced by broader economic factors and organisational performance. Those professionals with expertise in technological integration and real-time reporting are likely to be in higher demand, potentially commanding higher salaries.

Salary benchmarking for senior tax professionals

We’d like to mention that we are not intending to produce an In-House Tax Salary Survey this year for the simple reason that the data it tends to produce is too broad and not especially helpful. This is particularly relevant at the more senior level where there can huge variances in the minimum, median and maximum ranges of what a professional can command.

At SRM, we prefer a more bespoke approach to salary benchmarking. We are more than happy to speak with clients and candidates alike who would like a more specific understanding of their basic pay ranges, bonuses and general packages, tailored to their individual circumstances.

So, if you’re looking to hire a senior tax professional, or are wondering what your own earning potential is, then please free to contact me, James Rodgers, on jamesrodgers@srmrecruitment.com or give me a call on +44 (0)7852 322 955.