Training, certification expense limits

[Ashwin2007]

Is there any limit on the Training, certification expenses one can claim? The training is exclusively for the business interests.

[TheCoconutDog]

Is there any limit on the Training, certification expenses one can claim? The training is exclusively for the business interests.

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.

Someone more knowledgeable may be along in a minute to elaborate. Meanwhile, try pointing Google at HMRC's website and search for training expense.

[PerfectStorm]

A little tip a friend gave me; look for training courses abroad.

[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.

[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!

[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.

[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.

[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.

[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.

[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.