What should I expect from my accountant?

[Altwood]

I recently posted a question re software purchase and it's treatment for corporation tax purposes. (Thread 430195. Sorry not allowed to post a link)

I have discussed this matter with my accountants but, no matter how hard I try, they seem unwilling to offer an opinion or make a recommendation.

In the last email correspondence they said, and I quote:

As your accountants we are aware that there are different schemes/allowances but as we are not fully aware regarding the software details, it is difficult to confirm if the software qualifies so we need you to confirm that you believe it meets the requirements and we can then include it.

Bearing in mind that they had already decided how it should be treated without reference to me, having questioned the treatment, it seems mad that they now claim they don't know enough about the software to make a decision. I have subsequently given them a full breakdown of what the software is and it's use but they seem unwilling to commit themselves one way or the other.

I'd be interested in any comments from practicing accountants as to whether they think their role is to provide advice and recommendations in these sort of situations. Surely they have a better understanding of accounting treatments and I have a better understanding of the software so I would expect a conversation to follow and they would provide advice. I am aware that the final decision is mine but they haven't even provided me with alternatives or recommendations, I've had to go out to forums for that.

Am I expecting too much of my accountant?

 

[FreddyG]

I am not an accountant, but -

they now claim they don't know enough about the software to make a decision.

So you asked about a specific software and they didn't like it - so they body-swerved the question!

You could always ask what they do recommend - but then some partnerships get commission on recommending some bogus SaaS package!

 

[GLAbusiness]

I am NOT an accountant
As I understand the situation:

1. OP has obtained software to help run his business.
2. This is not subscription based. It is a one off purchase including IP, source code etc.
3. The accountant does not need to know details of the software itself. Just the detail of the purchase arrangements.
4. This is by no means an uncommon situation.
5. I would expect my accountant to know exactly how to handle this.
6. The simple question for the accountant is " should it be claimed up front or amortised (if so, over how many years)" . Are both options viable or is one simply not permitted?
7. If my accountant could not answer this question I would be changing accountants.

 

[DontAsk]

I am not an accountant, but -

So you asked about a specific software and they didn't like it - so they body-swerved the question!

You could always ask what they do recommend - but then some partnerships get commission on recommending some bogus SaaS package!

That's not what happened and the accountant would be unable to recommend such niche software.

Read the original thread.

 

[MyAccountantOnline]

They say ''but as we are not fully aware regarding the software details'' - have you asked them what details they do need to advise you properly?

 

[fisicx]

The accountant doesn’t know how the software works or if it does the job. Which means they can’t advise on its efficacy. All they seem to be asking is if you think it’s good enough @Altwood

 

[Daybooks]

If I understand your original questions from the original post you want to know:

1. whether the purchase should be treated as a capital purchase of plant and machinery or treated as an intangible fixed asset and
2. what are the corporation tax entries for either.

Now you want them to express an opinion or recommendation - presumably as to whether it is tangible or intangible with a view to it being tangible and you claiming more advantageous timing allowances. But specifically whether you should expect them to opine.

The definition of intangible under S713 to 715 of P8 CTA 2009 would ordinarily include software. S813 gives you the option of treating it as plant and machinery if it is an integral part of hardware. This answers your first question hopefully.

The tax treatment for the tangibles is generally the normal capital allowance regime whereas intangibles in simplistic terms is (or can be) akin to the accounting amortisation.

From the original post I believe your accountants suggested it was an intangible with a useful life of ten years. Seems reasonable.

What is your reasoning for it being plant and machinery? If you explain that to your accountant am sure they can discuss with you.

By way of example my conversation would be along the lines of:
“The tax law say this (e.g. s 713-715 Part 8 CTA), what life expectancy do you have for this software? The accounting and tax treatment follows this. What is your reasoning for not following this? For example is the software an integral part of some hardware?”

 

[WaveJumper]

Not withstanding the advice above I would only add this may (and I say may) be where "finding" the "right" accountant that understands your business needs / model etc can be worth their weight in gold.