M
No I work in very specialised "boutique" tax practice and am only outlining my own experiences of the queries that come in. Can't comment on Top 20 Accoutancy Firms, but many of our clients - mid level Accountancy practices based countrywide are only now looking at recruiting qualified tax people.
I agree with a lot of Mark Mc's comments.
Sometimes even tax consultants seek specialist legal opinions, or in some cases VAT specialist advices for certain projects.
Have you any evidence to support this assertion, particularly in relation to your use of the word "most".
If an accountant can only answer "the most very basic" tax questions asked by their clients, they will not last long in business. (Nor will they make any money, given the kind of fees that tax consultants charge for queries) Do you take their clients for fools?
Why shouldn't AITI members charge the fees that are charged for the work they do? I mean AITI qualified members have studied something which accountants have not (if the accountant has not also studied the AITI also) and are qualified to do something that the accountant is not so why shouldn't they be rewarded for the hard work it takes to attain the qualification?
Sometimes I think accountants look down their noses, in public anyway, at AITI qualified people so that whomever they are talking to don't think of using the AITI instead of the accountant.
Does it really? Why then is accountancy one of the few open professions, where unlike law, pharmacy & medicine for example, a person can trade as an accountant and call oneself an accountant regardless of whether they have any competence, training, expertise or financial resources to do so? And at the end of the day, if a client wants to do their own tax returns, no accountant in the world can stop them from doing so.It's all about money. The Accountancy profession jealously gaurds it's position when it comes to tax
Ironically, this sums up my entire argument much better than I could have put it myself. AITI members can command premium fees and salaries as they are specialists who can offer an important value-added service to their clients.
AITI members can command premium fees and salaries as they are specialists who can offer an important value-added service to their clients.
In contrast, general practice accountants offer less specialised services but covering a wider range of areas. The lack of specialisation means that their prices are normally lower than those charged by the specialists.
In contrast, general practice accountants offer less specialised services but covering a wider range of areas. The lack of specialisation means that their prices are normally lower than those charged by the specialists.
...I have seen at least one tax advisor recently contend that an AITI registered advisor, rather than a general practice accountant, is the only suitable person to handle a query in relation to tax registration for a new business.
Does it really? Why then is accountancy one of the few open professions, where unlike law, pharmacy & medicine for example, a person can trade as an accountant and call oneself an accountant regardless of whether they have any competence, training, expertise or financial resources to do so?
And at the end of the day, if a client wants to do their own tax returns, no accountant in the world can stop them from doing so.
Ubiquitous - What is your definition of a tax consultant and what qualifications should that person have in your opinion?
A tax consultant is someone who describes themselves as such
there is no legal basis for the term.
Most so-called "tax consultants" have no qualifications whatsoever, some actually double up as auctioneers, mortgage agents and overseas property salesmen!
Reminds me of one particular guy with a national media profile who describes himself as a tax consultant, and who has been described as such by others in the media, despite the fact that he has neither a tax nor an accountancy qualification to his name, and also the fact that his work is regulated by neither the ITI nor any of the accountancy institutes, nor anyone else.
The same guy was asked in a public forum some years ago for his view on the effects of technology on accounting and replied with the immortal comment "double entry bookkeeping is a thing of the past".
If your own business or industry sector has a marketing or branding problem, its up to you to address this. It won't be solved by blaming others.
MarkMc- is there anything preventing you from advertising/dealing directly with the public?
I think a huge part of the tension which has arisen in this debate is due to a failure on the part of Mark_Mc to understand a few basic points:
1. The fondly imagined 'wealthy clients' with silver spoons who just dole out money to 'the accountant' without really knowing what it is being spent on (i.e. specialist advice, whether AITI or not) are, largely, a figment of the imagination.
Good clients who need tax advice will usually also be informed and discerning clients (because if they are not, they just won't want to pay for top level advice)
2. The notion that accountants act as a 'barrier' to stop the AITI (or other specialist adviser) forming a direct relationship with the customer is misguided. The specialist tax adviser's customers are the solicitors and accountants who refer matters to him\her for advice. This is the only way that a good tax adviser can prosper. The market for high level tax advice is marked by a huge information assymettry between the service provider (i.e.Specialist Tax Adviser) and the ultimate consumer. It is perfectly understandable that the business model is, in effect, that somebody entrust their affairs to a solicitor and accountant who will in turn go out and buy the specialist advice when it is needed. That is why we have solicitors and barristers. That is why we have doctors and consultants.
If you want to have a happy and successful career as an AITI-qualified tax adviser, you need to stop seeing accountants as competitors and start seeing them as customers.
This is the only way that a good tax adviser can prosper.
MOB, I agree mostly with your post.
MarkMc also has a point. I have seen cases where the Accountancy practices do try to keep the client separate from theTax Advisor and in certain cases not tell the client the work has been outsourced. From my experience, it happens in more basic cases like the OP (very basic rental computations/CGT queries) for people who might even happen in off the street/golden pages/local town and not be a regular client of the Accountants. It happens more so in smaller Accountancy practices that do not have a designated tax department and absolutely everything is outsourced.
I also agree that some people think they can just "bounce" a tax question and are quite surprised when they get a bill. Again, smaller practices, who could not justify our charge out rates to their clients but still want the top end advice. Ultimately, we had to stop dealing with them and concentrate on a higher level of client/accountant.For the same reason (costs) we do not advertise in golden pages or take basic cold calls from the public.
As I keep saying, in my attempts to build up a client base I keep hearing "I have too much loyalty to my present "accountant".
I will give you a prime example of why accountants should not be handling tax work. In my last position as a tax manager an accountant was handling a sole trader cessation case. Two sets of accounts were done and the relevant adjusted profit computations were done by the accountant doing the day to day work (and crucially building a relationship with the client). The tax return relating to the first period of accounts had not been filed with Revenue and I stumbled (literally onto this fact shortly after joining the office) I looked over the figures and was alarmed at what was being done. I suggested to the partners of the practice that what should be done was to merge the accounts and take advantage of the cessation rules. This saved the client €40K and I wanted the firm to charge a higher fee for this premium work but a minor 3 figure fee had already been agreed with the client.
You're 100% correct there. Unfortunately the country is full of people who love to rip you off if they think they can trick you into giving them something valuable and useful (in this case expertise) for nothing. The only solution there is to say the magic word "But..."I also agree that some people think they can just "bounce" a tax question and are quite surprised when they get a bill. Again, smaller practices, who could not justify our charge out rates to their clients but still want the top end advice.
...
One time at a Seminar, one Accountant(who dealt with our firm donkey's years ago) showed up and sat with one of our tax people at breakfast and proceeded to take out an A4 sheet with a list of questions for his clients on it. Despite not hearing from him in years, he thought he was getting a freebie" and was more than surprised to get a bill a couple of weeks later.
Hi Mark_Mc,
I think that this may have more to do with the dynamics of typical client/professional relationships than the structural differentiation between tax consultants and accountants.
Put simply, a client who is happy with the service provided by their current provider will not change to another provider without good reason. In setting up and developing my own practice, I learned quickly that it is largely pointless to ask people directly to become my clients if they already had someone acting for them. Accounting and tax services are "relationship services", ie built on the ongoing relationship between the professional and the client, and when the relationship is good, why break it? On the other hand, if they want to move, they will do so in their own time.
All one can do in building up a client base is to be patient, promote oneself as best one can (without being too pushy) concentrate on doing ones best for the clients that come in the door, build up a reputation based on quality of service, keep plugging away and before too long you will have a decent-sized client base.
My approach there would have been to go back to the accountant, propose the bones of your solution, emphasise the additional value-added to the ultimate client, but make the detail of your solution conditional on them paying you a decent fee based on the value you have provided. Its up to them to decide whether to pay this from their own resources or renegotiate their own original price to their client, on the basis that the nature of the original assignment has changed drastically in the meantime.
I know this is easy for me to say as it wasn't me who was in your position at the time, and believe me it is hard to get one's negotiation strategies right all the time, or even most of the time
Hi MandaC
You're 100% correct there. Unfortunately the country is full of people who love to rip you off if they think they can trick you into giving them something valuable and useful (in this case expertise) for nothing. The only solution there is to say the magic word "But..."
What did you do in the early days when you started without a client and had to pay the bills that wouldn't keep, i.e. mortgage, car loan, etc? It's these practical things that I have always wanted to ask an established operator because sometimes I think their family must have some financial resources to back them in the early days.
I have read this thread with great interest particularly as I am considering starting the AITI course. Having spoken to a few contacts, solicitors and accountants, (I am neither, I am a Financial Adviser) the implication from them is that AITI is just an 'add on' for those in the accountancy and legal profession. Is this the case or is it a justifiable qualification for someone like myself? your thoughts would be appreciated.
Hi Mark, do you have your own practice or do you work in an Accountants office? And are you Dublin based, or provincial?
You probably know already but there is a shortage of (good) tax consultants in Dublin. There are good salaries on offer (six figure sums)
The tax world is not as sewn up as it used to be, so keep at it and good luck.
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