How indirect tax is changing and what it means for tax leaders 

Indirect tax is entering a period of structural change. Across the UK and globally, tax authorities are moving away from retrospective reporting towards real time data collection.  

The rise of e‑invoicing, digital reporting requirements and continuous transaction controls is fundamentally reshaping how value added tax is managed, reported and governed. 

For tax leaders such as Heads of Tax, this shift is not only a compliance challenge. It’s changing the operating model of the indirect tax function and, increasingly, the type of tax professionals required within it. The function is moving closer to data, systems and finance transformation, with implications for leadership, hiring and long-term strategy. 

Understanding how the indirect tax system is evolving is important for tax leaders who want to remain effective in a more complex, more visible and more technology‑driven environment. 

The move towards real time reporting 

Historically, indirect tax has been managed through periodic tax return submissions and reconciliations. This model is being replaced by systems that require transaction level data to be submitted continuously or near real time. 

E‑invoicing and digital reporting regimes are becoming more common across jurisdictions. While HMRC has not yet introduced a full e‑invoicing mandate, the UK government has already begun the shift through initiatives such as Making Tax Digital. MTD has demonstrated that the direction of travel is towards more automated, connected reporting across the tax year. 

This shift creates several pressures: 

• Reduced tolerance for manual processes and delayed reporting 

• Increased scrutiny from tax authorities such as HMRC 

• Greater reliance on system accuracy and data integrity 

For tax leaders, this means the indirect tax function can no longer operate as a downstream compliance activity. It must be embedded earlier in the transaction lifecycle, particularly across supply chains and finance processes.

From compliance to continuous monitoring 

One of the most significant changes is the move from periodic compliance to continuous oversight. Instead of reviewing data after the event, tax authorities increasingly expect access to transactional data in real time. 

This changes the role of the indirect tax function in several ways: 

• Errors must be identified and corrected earlier in workflows 

• Controls need to be embedded within systems rather than applied manually 

• Data quality becomes a core accountability 

This shift also aligns indirect tax more closely with other parts of the tax system, including corporate tax and, in some cases, income tax reporting for global businesses with complex structures. 

Rather than a back‑office process, tax is a visible and continuously monitored part of finance operations. 

The growing importance of systems and data 

The move towards e‑invoicing and real time reporting is accelerating the importance of technology within indirect tax. What was traditionally a technical VAT discipline is becoming increasingly linked to systems, data and transformation programmes. 

Organisations are investing in: 

• Tax engines to automate value added tax calculations 

• ERP integrations aligned with broader finance change 

• Data analytics to monitor performance and compliance metrics 

• Automation to streamline reporting processes 

This shift is also being driven by the complexity of global indirect tax obligations, particularly for businesses managing cross‑border operations, customs duties and differing exemption rules across jurisdictions. 

As a result, heads of tax must now engage with technology at a much deeper level. Understanding systems, data flows and reporting processes is becoming just as important as technical knowledge of VAT rules.

Reshaping the indirect tax function

 These changes are driving a rethink of how indirect tax functions are structured. 

In many organisations, the model is moving towards: 

• Integration with finance transformation and ERP projects 

• Dedicated roles focused on tax technology and automation 

• Closer collaboration with IT, finance and data teams 

• Increased focus on scalability and efficiency 

Indirect tax is also becoming more strategically important. VAT is now being considered alongside areas such as direct taxes and corporate tax when assessing overall risk, compliance and commercial decision making. 

This reflects a broader shift. Indirect tax is no longer treated separately from the wider tax function. It’s  becoming a key part of how organisations manage financial risk and compliance.

What this means for tax leaders

For tax leaders, the implications are significant. The role is expanding beyond technical oversight into leadership across systems, data and transformation. 

Key expectations now include: 

• Leading or influencing tax technology initiatives 

• Ensuring indirect tax is aligned with MTD and future digital reporting requirements 

• Managing risk in a real time reporting environment 

• Supporting the integration of indirect tax into wider finance processes 

There is also increased interaction with CFOs and senior stakeholders, particularly where indirect tax impacts cash flow, pricing and operational decision making. 

This requires a broader skill set. Technical expertise in VAT, exemptions and compliance remains essential, but it is no longer sufficient on its own. 

How hiring requirements are changing

 One of the clearest outcomes of this shift is the change in hiring profiles across indirect tax. 

The market is seeing increased demand for professionals who combine: 

• Strong indirect tax and VAT expertise 

• Understanding of tax technology, systems and data 

• Experience with transformation, automation or MTD implementation 

• Ability to work across finance, IT and supply chain functions 

Previously, technology was a secondary requirement within many roles. That is now changing. Dedicated positions are being created to support e‑invoicing, real time reporting and broader tax transformation. 

There’s also growing demand for professionals who understand the wider tax system, including the interaction between indirect tax, corporate tax and global compliance frameworks. 

For many organisations, this talent remains limited. Traditional tax professionals may not have had exposure to systems or data, while specialists in areas such as automation or artificial intelligence may lack technical tax expertise.

The emergence of hybrid tax profiles

 As a result, hybrid tax profiles are becoming more common. 

These individuals typically bring: 

• Technical knowledge of VAT, indirect tax and related compliance 

• Experience with systems and data transformation 

• Strong understanding of business processes and workflows 

• Ability to translate technical requirements into operational solutions 

They often sit at the intersection of tax, finance and technology, supporting: 

• System implementations 

• Process redesign 

• Real time reporting readiness 

• Efficiency across the tax function 

For tax leaders, building a team with this combination of skills is now essential. 

Preparing for the next phase of change

Looking ahead, indirect tax will continue to move towards real time reporting, increased transparency and greater reliance on automation and technology. 

Tax leaders should focus on: 

• Assessing current systems and readiness for e‑invoicing 

• Identifying skill gaps within the tax function 

• Engaging early with finance transformation programmes 

• Aligning indirect tax with broader business and compliance strategies 

This is particularly important for businesses operating across multiple jurisdictions, including those managing obligations for sole trader or self‑employed populations in certain markets, or companies supporting global employee mobility. 

The organisations that adapt most successfully will be those that recognise that indirect tax is a central part of the broader finance and data ecosystem. 

How we can help you build a future ready tax function

 We work closely with organisations and tax leaders across the UK to navigate the changing indirect tax landscape. We understand how e‑invoicing, Making Tax Digital and real time reporting are reshaping the skills required within modern tax functions. 

Our specialist consultants support hiring across technical VAT, tax technology and transformation roles, helping clients build teams that combine expertise in systems, data and compliance. 

Whether you’re looking to strengthen your indirect tax capability or evolve your team to meet future regulatory demands, get in touch to find out how we can help you secure the right talent for the years ahead.