Offsetting Cost of Training

[Taggs101]

Hi

I’ve been using an umbrella company for several years now but have now setup my own Ltd, which is registered, bank account in place, but not yet trading.

I have come across a course I intend to do (cost including out of town expenses approx £6000) my question is how do I actually go about paying for and then off set the cost of the course.

Is it as simple as writing a cheque from my personnel savings account to my Ltd, paying the training company from the Ltd, collecting all receipts and then offsetting it all at the end of the year?

I’m confused as to how the taxman would interpret the initial deposit into the Ltd, i.e. would it actually be classed as income, even though it’s a straight transfer.

Any help would be appreciated.

[NotAllThere]

You are a director of the company. As such, you can loan the company money. So, you can loan the company the cost of the course, and the associated costs, and, once the company has some money, it will pay you back.

You could also pay the for the course (and other costs) yourself, and, when your company has some money, put in an expenses claim to it.

Or you could use a combination of both approaches. In this case, I'd loan the company the cost of the course, but for the travel and subsistence, I'd claim it from the company.

At the end of your company tax year, the cost of the course will be deducted (along with other expenses) from the profit the company made. Any profit left over will be taxed.

It's very very important to understand that your money is your money, and the company money belongs to the company. You own the company, but the company's money is not yours.

[chris79]

You need to get some book keeping in place and understand it, or at least get an accountant who knows this stuff inside out.

[tim123]

Right, well that covered the logistics,

What's not been covered is whether the course is actually allowable as a tax deduction or not.

It IS allowable if it is a course which gives you skills which are specifically required for you to do a particular piece of work which you have already been contrated to do.

It Is NOT allowable if it course which gives you skills which are intended to be used to secure contracts in a type of work that you don't currently do.

However (un)fair that may seem to you, that is the rule that HMRC apply.

HTH

tim

[NotAllThere]

I guess it depends on what is meant by skills in a "type of work that you don't currently do".

For a c++ programmer to decide to do a SAP course would seem to fall foul. But a J2EE developer to do a Netweaver course could be seen as an extension of current skills. But still doing ERP development.

Taxman never bothered me about job related training - but that was pre 2002.

[tonibat]

How about a course that will help you run your company rather that helping you do the work that brings in the money?

[ASB]

In general don't think about expensing the course. Look at the thread on books and Bob Jones replies. It is likelyly that if the company books and pays for trhe course then it is a business expense as it is in the persuance of trade. If you book it yourself it almost certainly isn't. This is because the test applied for whether it is allowable are different for business expenense and employment related expenses. Yes I know it may sounbd bonkers but them's the rules.