The effect of tax preparers on corporate tax aggressiveness: Evidence form the UK context

Abstract

AbstractThis paper studies the role of tax preparers in tax aggressiveness. Based on a sample of 342 UK companies indexed on the Financial Times Stock Exchange (FTSE) 350 from 2006 to 2016, it finds that external tax preparers are more tax aggressive than internal ones. The result is explained by the capability of external preparers to take more aggressive tax positions than internal preparers because of their knowledge in different changes to tax law, and their higher expertise in this field. The findings has implications for managers, policymakers and researchers.