Gabelle founder and managing partner Paula Tallon discusses her love of tax and the process of setting up her own firm
ESTABLISHING a firm from scratch would be, for most, a fairly daunting task. There are, for example, the fundamentals of finding your niche, working out where to base your firm and sorting out insurance, accreditation and various other administrative tasks to consider before you can even begin to trade.
That, though, is all part of the “fun”, says Gabelle’s founder and managing partner Paula Tallon, who in three years has built the firm up to one that has arguably the best view of the state of the tax market, providing as it does, tax advice to accountancy and law firms.
Previously, Tallon was at BDO as a partner and head of tax support, having had her previous employer, Chiltern, acquired by the top ten firm. Eventually, given the larger corporate environment and a desire to be in “a tax-only place”, she went her own way.
By her own admission, too, Tallon is not a “big firm person”, preferring teams of no bigger than “20 or 30 people” to a large corporate environment, providing all manner of professional services.
“Setting up was really fun,” she enthuses. “We started with a completely blank canvas, and you suddenly realise you’re going to market. We had our name – as in individuals ourselves, having been involved with the CIoT and the ICAEW for years – but suddenly starting with a blank canvas, we had no name for the firm and no offices.
For the love of tax
Indeed, looking to set up her own firm may even hark back to something rather fundamental to Tallon, who reveals early on that she “loves tax”.
“I’ve always loved tax,” she says. “When I was seven I wanted to be an accountant, but I wanted to be a tax accountant. I was very specific.”
The bread and butter elements such as marketing, sales and sourcing clients were, Tallon says, “the easy bit”.
“The difficult bit was finding an office,” she explains. “We needed furniture, we needed banners, we needed basic things like professional indemnity insurance, money laundering regulations – all the things you never think about in a large firm and you take for granted. You don’t really think about where they come from or what it’s like to suddenly do all of that.”
That whole process, says Tallon, was incredibly capital-intensive and caused several unforeseen difficulties.
“Everyone required deposits from us,” she recalls, adding she was quite reliant on an ICAEW checklist for starting up in practice.
“Even having to phone up O2 to organise mobile phones, for O2 to say we couldn’t have any because we’re a new business unless we gave them £500 deposit for each phone in case we ran up bills we couldn’t pay was tough. It’s because you’ve no credit history. As an individual, you’ve got credit history, but as a business, you’ve got nothing. You’ve got all these expenses, and no income coming in.”
Given those challenges, establish the firm was subject to meticulous planning, right down to the name, she says. Chiefly, it had to be “one word related to tax”, Tallon says.
“I didn’t want an old-fashioned partnership name,” she explains. “And so, we came up with Gabelle, the name of the old French salt tax.”
Knowing few would immediately know what the name means, the strapline “expert tax support’ was added.
With branding established, it was about “getting the name out into the market” through articles, lecturing and “knocking on doors” in order to drum up interest.
As the firm grows and attracts people both on a staffing and client level, Tallon is acutely aware of the responsibility they face to match their expectations.
“It’s having that responsibility to know that people are coming across and joining us because they see a really good business, and it’s up to us to make sure we deliver to them,” she says.
“If you go to a large firm, you should have the security that it’s financially viable. As a smaller firm, we have had people say ‘can we have a look at your accounts?’ because they want to see how the business is financed and look at our bank balance. If it’s the right person and we’re really serious about taking them on, then we have no problem.”
Gaining that momentum, particularly in the midst of the deepest recession since the Great Depression would, presumably, have represented a substantial hurdle.
Not so. The firm is privately funded, “which helped” by removing the need to approach banks, Tallon wryly notes.
“Starting at a time when things are really tough, you start at rock-bottom, and no matter how difficult it was, it couldn’t get any worse. It’s probably why we’ve watched costs and we run quite a lean business,” she says.
The primary impact of that time has been seen in her initial growth plan, and while reluctant to talk specific numbers, the firm’s latest abbreviated accounts filed with Companies House show a substantial growth in debtors, indicative of growing profits.
“Where we are now is probably where I wanted to be after two years. After three years, I wanted to be at thirty people and we’re at twenty,” Tallon concedes. “But we’re very busy now, and that’s a good sign, and we find it’s much easier to win work as we’re now known in the market place.”
Despite that, it hasn’t impeded growth activity, with Gabelle making its first acquisition with Matthew Hutton’s tax practice in September last year, which advised on capital taxation until September 2000 and subsequently concentrated its time on lecturing and to writing.
“Matthew’s business sits very nicely with what we do, but it’s just into law firms, and much of our work is about practice development and looking at what they do,” Tallon explains. “It’s working with accountants, and even though my background is in tax, we’ll look at what they do and how what we do can fit in with that. It’s good fun.”
Fun, it seems, is the common denominator for Tallon, and that’s how she intends to keep it.
“I have my tax life, and my personal life, and that’s it.”
Paula Tallon’s CV
July 2011 – Present Managing Partner, Gabelle LLP
Oct 2010 – July 2011 Owner, Tallon Tax
May 2005 – Sep 2010 Partner /Director and Head of Tax Support for Professionals, BDO LLP/Chiltern Plc
Sep 2000 – Apr 2005 Partner, Numerica
Gabelle in numbers
Offices: One, in London
Staff: Five partners, 16 staff
Service lines: Property tax, owner-manager businesses & corporates, international tax, private client, tax investigations, VAT