Difference between Tax Advisor and Tax Consultant

Tax Advisors and Tax Consultant, sound the same?

You might be wondering if Tax Advisors and Tax Consultants have the same role to play, but that’s not the case.

As the businesses expand, they tend to earn more profit. Simultaneously, the tax liability also increases. Therefore, businesses need tax advisors and consultants to help them plan tax saving strategies. Tax advisors and Tax consultants are the special professionals who provide services to organizations and individuals associated with tax challenges. Tax advisors and Tax consultants both assist businesses as they combinedly use the knowledge of tax laws and finance with skills in accounting and auditing to help minimize tax liabilities for their clients.

If you are someone who needs help with taxes, then you must know the difference between these two. This Blog is a guide that discriminates Tax Advisors and Tax Consultants in London, UK to help you have a better understanding.

Who are Tax Advisors?

A tax advisor is an expert in finance having advanced training and knowledge of tax accounting and tax laws. The purpose of attaining the tax advisory is to minimize tax liability while ensuring compliance with tax laws in complicated financial situations. Certified Public Accounts (CPAs), tax attorneys, enrolled agents and some financial advisors could potentially be tax advisors.

Tax advisors are specialized in effective tax planning, and they provide beneficial guidance, information, advice and solutions to specific problems. Tax advisors use the knowledge of tax codes to determine the opportunities for the clients to save money on their taxes. Advisors may work for accounting firms providing accounting and tax services, law firms or they may be self-employed.

Role of Tax Advisors

Tax advisors are those professionals who are experts in providing advice and guidance on how to optimize the financial structure so that they comply best with the tax laws. These advisors are specialized in taxation and provide tailored advisory services based on the client’s situations. The services provided by tax advisors range from filing taxes to minimizing deductions and giving tax implications of business decisions. They help clients with the preparation of tax filings and represent them before tax authorities.

Tax advisors are informed individuals, and they keep check on the latest tax regulations so they can provide guidance to minimize their tax burden. This may involve guidance on selecting the appropriate forms to file and identifying which deductions you can utilize to reduce your tax liability. Tax advisors work closely with the clients to make sure that none of their needs go unnoticed. Tax advisors must stay current with the latest developments in their field and be able to communicate complex concepts in a clear and concise manner. Strong organizational skills are also essential, as they often juggle multiple projects simultaneously. By providing expert advice on tax matters, tax advisors help clients make informed financial decisions, minimize their tax liabilities, and maximize their savings. With their expertise, they ensure clients comply with tax laws while managing their taxes efficiently and effectively.

What Is Tax Advisory Services?

As said before, Tax advisors analyze financial information and provide proactive guidance to help clients understand the impact of their financial decisions. They offer strategic advice on how to optimize tax positions, always considering the client’s personal or business financial goals.

Types of tax advisory services include:

• Guidance on federal, state, and individual income tax returns
• Advice on corporate tax returns at both federal and state levels
• Assessing the tax implications of acquiring or selling business assets
• Guidance on corporate and partnership restructuring or reorganization
• Estate planning, including will and trust preparation
• Federal, state, and local tax planning for individuals and businesses
• Understanding the tax implications of real estate transactions
• Personal financial planning
• Income tax planning for executives, including compensation and benefit strategies
• Investment planning
• Analyzing the tax impact of gifts and charitable donations
• Evaluating the tax consequences of income, deductions, major purchases, and investments
• Tax guidance on college savings programs
• Retirement planning strategies
• Representing clients in tax negotiations and disputes with tax authorities
• Handling state, or local tax audits on behalf of clients
• Property tax assessment assistance
• Succession planning
• Providing tax advice to executors and trustees
• Reviewing tax credits to maximize allowable credits (e.g., R&D credits)
• Trade and customs tax services and guidance
• Transfer pricing evaluation, documentation, and adjustments to existing policies
• Tax valuation services

Tax Consultants

Tax consultants provide consultancy services to the clients. They do a thorough analysis of the financial performance of a client to identify the shortcomings and suggest ways to increase the effectiveness and efficiency of the organization.

Tax consultants assess a client’s current tax situation and provide tailored recommendations for improvement. For instance, a business may hire a tax consultant during the year to ensure accurate filings, or an individual might engage one to handle their personal taxes. Specializing in tax law and financial counseling, tax consultants advise clients on income tax returns and a variety of financial matters, such as estate, trust, and retirement taxes. They must also stay up to date with the latest tax laws and regulations, both at the federal and state levels.

In addition to helping individuals, tax consultants also assist businesses and business owners with their tax needs. Corporate tax law is often more complex than individual income tax rules, prompting many tax consultants to specialize in business tax services. This includes strategies for minimizing a company’s tax liability. Ensuring they take full advantage of available tax benefits, and addressing other corporate tax-related matters.

What Sets Tax Advisors and Consultants Apart?

Advisory services are centered around long-term relationships, whereas consulting services are typically project-based with a defined scope and timeline. The Advisory services offer ongoing guidance and overall support, while consulting services focus on addressing specific, well-defined issues. Advisory services are crucial for identifying potential problems that could negatively impact clients in the future. In contrast, consulting services are more adaptable and are aimed at swiftly resolving existing issues.

Tax consultants offer expert knowledge on the legal and practical aspects of taxation. They focus on researching and analyzing tax laws, regulations, and other related documents, and can advise on the most effective ways to structure a business or individual’s tax situation. Tax advisors, by contrast, provide broader tax planning services. This includes creating strategies to minimize taxes and optimize savings. In addition to preparing income tax returns and representing clients before tax authorities, tax advisors also offer guidance on overall financial planning.

Outcome

The prime focus of tax consultants is on research and analysis whereas the tax advisors concentrate on helping the clients to optimize their tax strategies. Tax advisors are more proactive as they recommend changes in how the taxes are managed, rather than solely responding to client inquiries. Consultation is preferable for faster growth and more exit choices whereas the advisory allows better work-like balance. The better decision is made based on the professional objectives and your preference. At SSCOGLOBAL UK, we provide tax advisory services to help you stay ahead of the curve.