Training, certification expense limits

[malvolio]

Well if you're not going to listen here's no point arguing. HMRC have defined the boundary.

You're wrong. End of.

[pmasoft]

It's actually perfectly simple: "Wholly and Exclusively" remains the baseline. If you aren't already earning money doing it, you fail that test since you personally gain from the additional skills or qualifications.

No it isn't perfectly simple, or we would not have this and other ongoing threads.

An example, off the top of my head, would be IT training. Most of us carry out training/knowledge transfer of permies. So if your LtdCo diversifies into training courses to add an extra revenue stream and feels your presentation skills need improving they may send you on a relevant course. However those presentation skills may then enable the LtdCo or you personally to provide non-IT courses.

BigCo gets away with it because they can argue that they need the skills in house so will train the most suitable candidates. However, if those people leave shortly afterwards they will almost certainly be billed for the training costs, for exactly the same reason.

LittleCo can use the same argument; it can only work with in-house resources as would BigCo if it wasn't willing to hire in new staff.
The cost reclaim would only happen if it is written into your employment contract and the definition of "shortly" would be specified as an actual timeframe.

[TheCoconutDog]

Training, certification expense limits

It's actually perfectly simple: "Wholly and Exclusively" remains the baseline. If you aren't already earning money doing it, you fail that test since you personally gain from the additional skills or qualifications

BigCo gets away with it because they can argue that they need the skills in house so will train the most suitable candidates. However, if those people leave shortly afterwards they will almost certainly be billed for the training costs, for exactly the same reason..

It's taxation. It's never "perfectly simple", there are always shades of grey. You could make the same argument for SmallCo as that of BigCo.

[malvolio]

It may be only my perspective, but it would give the OP or anyone else ammunition against an HMRC challenge as to training expenses being allowable.

As an aside, I would also point out that a majority of memorandum and articles of association allow a Ltd Co to pursue any type of business it chooses and is not limited to just IT or just bricklaying etc. that it currently carries out.

It's actually perfectly simple: "Wholly and Exclusively" remains the baseline. If you aren't already earning money doing it, you fail that test since you personally gain from the additional skills or qualifications.

BigCo gets away with it because they can argue that they need the skills in house so will train the most suitable candidates. However, if those people leave shortly afterwards they will almost certainly be billed for the training costs, for exactly the same reason.

[pmasoft]

It may be only my perspective, but it would give the OP or anyone else ammunition against an HMRC challenge as to training expenses being allowable.

As an aside, I would also point out that a majority of memorandum and articles of association allow a Ltd Co to pursue any type of business it chooses and is not limited to just IT or just bricklaying etc. that it currently carries out.

[TheCoconutDog]

I am aware of some big companies who will pay for all sorts of courses/qualifications that are not directly related to the person's existing role, such as MBA/IT programming courses etc. There is no tax liability on the employee. So from my perspective if you are in IT then any IT course can be justified in your role as an IT consultant. The same for any other field where the course or qualification will bring benefit to the employer.

Your perspective and HMRC's may not align though

If the OP is sailing close to the wind, then they should make provision for getting wet.

[mudskipper]

I am aware of some big companies who will pay for all sorts of courses/qualifications that are not directly related to the person's existing role, such as MBA/IT programming courses etc. There is no tax liability on the employee. So from my perspective if you are in IT then any IT course can be justified in your role as an IT consultant. The same for any other field where the course or qualification will bring benefit to the employer.

Sounds logical, but unfortunately it's HMRC's perspective not pmasoft's that the OP needs to worry about.

[pmasoft]

I am aware of some big companies who will pay for all sorts of courses/qualifications that are not directly related to the person's existing role, such as MBA/IT programming courses etc. There is no tax liability on the employee. So from my perspective if you are in IT then any IT course can be justified in your role as an IT consultant. The same for any other field where the course or qualification will bring benefit to the employer.

[Contreras]

There is no financial limit as such.

As a rule of thumb:

- If the training is required to help with your existing responsibilities to the business then it is a legitimate business expense, otherwise it is BiK.

- If the training is with a view to achieving a personal qualification then it is taxable as a BiK, ...

- ... unless the qualification is a professional requirement of your trade, in which case it can be a business expense.

If it doesn't fall neatly into the above categories then you need to look in more detail and without the rose tinted glasses. Do not expect that Caribbean cruise to go unchallenged!

[Jessica@WhiteFieldTax]

Depends on the skills you're developing. From memory, if you're developing or maintaining existing skills for existing lines of work, then ok. If you're acquiring new skills for a new line of work then no.

That principle is correct. There are no limits as such, just the boundary between existing skills and new skills, which is, of course, a blurred one.

Alas the blurred edge then tends to be determined by absolute amount; a one day course on anything goes through, a three year masters, no matter how relevant, doesn't. Of course in saying that, it's all dependant on HMRC actually asking questions - many people will expense a masters but it being approved by HMRC and HMRC not noticing it are different things.

Sorry, OP, I appreciate its not clear.