Training and tax position

[Unix]

There's a big difference between R&D and training - the HMRC manuals make that pretty clear.

What if you are offered a contract then find out it requires skill X, which you don't have, that means you can't take it costing your business money? No way I will put the training through and it's up to HMRC to prove it's not for use on my business, not risking my livelihood because of some wooly rule.

[sal]

I would put it through the business, it will benefit the business in the future, if we are saying you can;t claim anything unless it has an immediate benefit then how could any company do research and development?

Forget that you are both director and employee of YourCo.

Acting as a Director would you pay Y for a training course of employee A (disregard the fact that you are A)and then pay him X for actually doing the job at some point in the future or would you rather get employee B (that already have the skill) on board in the future and pay him X, saving on the Y...

Will HMRC be able to prove that the skill wasn't part of the current contract or not is entirely different story.

[malvolio]

What if you are offered a contract then find out it requires skill X, which you don't have, that means you can't take it costing your business money? No way I will put the training through and it's up to HMRC to prove it's not for use on my business, not risking my livelihood because of some wooly rule.

Then you are committing tax evasion; the rule is not woolly, it's very clearly stated. To meet your stated requirement, the training is not tax deductible (I assume you understand the difference between business cost and BIK...)

[sal]

What if you are offered a contract then find out it requires skill X, which you don't have, that means you can't take it costing your business money? No way I will put the training through and it's up to HMRC to prove it's not for use on my business, not risking my livelihood because of some wooly rule.

You as a person lacking skill X and YourCo as a company lacking skill X are 2 entirely different cases. YourCo can employ another person to do the job and still take the contract. The fact that it's not in your personal best interest doesn't matter and is not an excuse in HMRC eyes.

[monoceros]

I would put it through the business, it will benefit the business in the future, if we are saying you can;t claim anything unless it has an immediate benefit then how could any company do research and development?

(Just read the post 11 specifying that R&D and training are very different so the first part of this post is probably irrelevant - but the second...?)
I did also want to raise that point about R&D. Certainly my last permie role we did a lot of R&D and claimed a lot of tax relief on it (it was software product company).

How would the situation change if my company is also developing a software product that is directly related to the training area (so to be specific I have developed a product for analysing Oracle performance statistics which I offer for free currently as its really at a beta level, or I may decide to never charge for the tool but use it is a way to introduce new performance consulting business). So could I position the justification for the Oracle performance training is 1. to reinforce my understanding and improve the product offering, 2. to prove credibility in the area (assuming I pass) and hence marketing.

[tractor]

...

I would put it through the business, it will benefit the business in the future, if we are saying you can;t claim anything unless it has an immediate benefit then how could any company do research and development?

Exactly! You do have to be realistic about it, complete retraining is a no-no but I consider refresher training to be acceptable. If you think you can justify it, go for it, you only have to argue your case.

[GillsMan]

So how would this affect me? I have an e-learning development company, and I have two full time permie employees (three if you include me). Say, I wanted to offer some development of Moodle to our clients. There's no actual work for that yet, but I could see that it would be useful for us, and could allow us to bill more in the future.

Can I not pay for Employee 1 or Employee 2 to go on a course to learn that, to diversify what we offer. It would be a lot cheaper than bringing in another employee who already has that skill. Does it make a difference if the person who I send on that course is not Employee 1 or Employee 2, but me - the Director?

Or does HMRC's thinking really only apply to one-man-bands?

[tractor]

.....

You used the search as shown here?

http://forums.contractoruk.com/welco...uk-forums.html

I get 6800 threads on all this topic...

https://www.google.co.uk/search?q=tr...QCg&gws_rd=ssl

A training course on how to use google won't be claimable but certainly sounds like it would be useful.

And you don't see that as the problem? Someone has a simple question, that many people can help with, they don't seem to be a sockie and the answers to that question, whilst I don't have the need to search for it atm, could well be relevant to me at some time in the future.

I had a similar problem a while ago wrt Opting Out, I looked at the sticky first and even that is a nightmare. 35+ pages of drivel, counter drivel, misconception, misunderstanding and supposition put forward as fact or even legal opinion with a little value hiding away in the corners. Who wouldn't be confused?

People asking relevant questions, even repeated from time to time refreshes things and makes for debate. Otherwise we are limited to debating only the news.

Give 'em a break.

[malvolio]

So how would this affect me. I have an e-learning development company, and I have two full time permie employees (three if you include me). Say, I wanted to offer some development of Moodle to our clients. There's no actual work for that yet, but I could see that it would be useful for us, and could allow us to bill more in the future.

Can I not pay for Employee 1 or Employee 2 to go on a course to learn that, to diversify what we offer. It would be a lot cheaper than bringing in another employee who already has that skill. Does it make a difference if the person who I send on that course is not Employee 1 or Employee 2, but me - the Director?

Or does HMRC's thinking really only apply to one-man-bands?

I thought we made that clear already. If your business is generalised, you have a spectrum of fee-earning activities and you can train your people however you like. It's the personal benefit to someone of learning skills that are not directly related to their fee-earning business; that doesn't really apply to employees, who do what they're told, and in your context you are effectively acting as an employee.

[northernladuk]

What if you are offered a contract then find out it requires skill X, which you don't have, that means you can't take it costing your business money? No way I will put the training through and it's up to HMRC to prove it's not for use on my business, not risking my livelihood because of some wooly rule.

You are not risking your livelihood, you are just not saving 20 whole massive percent on it. If you can make money out of it then you pay it yourself as an investment. Don't let the tax tail wag the business dog.