I have recently left an accountancy firm and set up my own practice. I have agreed to pay a % of all clients who come over to the new firm in the first year. I can't get my head around whether that is me purchasing their goodwill, and therefore non tax deductible, and to be capitalised and amortised, or whether it is actually an allowable cost of the business that can be put through the P&L as and when I pay for them?
I have been involved in purchasing a whole business before and the amount that was agreed was capitalised as goodwill but I think this is slightly different in that we are not paying for the whole goodwill of the firm, but are actually 'buying' specific clients. There are obviously tax consequences between the two different scenarios (that wouldn't have been even a few years ago).
I have searched and googled, but it is quite a specific question, and I haven't fouund a meaningful answer.
Thanks in advance for your help.
I apologise that I have posted this anonymously but it is of a sensitive nature.