Training Costs

[northernladuk]

Ask yourselves how many permies go on training courses funded by their employees and consider whether this is counted as a business expense by the employer.

This isn't that relevant though. Employers can put employees through any number of courses to grow them as an asset to the company. This doesn't mean it is allowable for tax purposes. What companies do isn't directly related to what we can do. We don't know how they handle it tax wise and the size of the company makes it easier to swallow (or hide).

[northernladuk]

The trouble is that our accountants will give their own opinion, people here are looking for a broader discussion of other people's opinions (maybe even yours!) of what's acceptable.

Indeed but the wording for this one is pretty clear. There cannot be much argument over what is allowable and what isn't. Our opinion that this isn't fair and badly worded doesn't count for much when it comes the the numbers. We know the rule, we know how it fails. Not much to discuss except complain to a load of other people that totally agree IMO. The only question to answer is wether or not you claim it and are willing to argue it in the extremely rare situation you get invetigated and this gets picked up and lets be honest HMIT isn't going to know the difference between one tech course and another to a certain extent.

[captainham]

The trouble is that our accountants will give their own opinion, people here are looking for a broader discussion of other people's opinions (maybe even yours!) of what's acceptable.

Fair enough (except the bit about wanting my opinion...you must have got that wrong ) !

For me, any training to do with my profession, i.e. the skill/knowledge that currently brings in my Ltd's income, is well within the scope of what is allowed as a deductible expense.

As Greg said earlier, this could be quite a broad scope, so something like speling bee's PRINCE2 would be included in that scope.


Ask yourself this: are you going on a course to improve/expand your knowledge/marketability in your current area of expertise? If the answer is yes then that's a no-brainer for me.

As long as you are sure you are going on a course for the right reasons (and not just a blatant p!ss-take/jolly for no other reason than you feel like it), then even if HMRC wanted to challenge this in the future (and hopefully they shouldn't), it shouldn't be much of a stretch to come up with a convincing argument as long as you have convinced yourself in the first place that it's being done for all the right reasons.


At the risk of going OT:

Can't remember who said recently-ish on a thread about expenses and what is acceptable there, but anyway he said he had recently bought not one but 3 PCs for his Ltd. Excessive/mick-taking? In his case, no as he could genuinely justify a sound business reason why this kit was needed, so if HMRC wanted to challenge it, bring it on (or words to that effect).

I on the other hand have just bought a new Android tablet, but out of my own pocket. Yeah I probably could have 'got away with' putting it through my Ltd, but in my line of work it's not justified (it's a personal gadget, pure and simple), so if you can't convince yourself about why you are spending your Ltd's money, good luck convincing the taxman!

[geoffreywhereveryoumaybe]

Thanks for the posts ...

... and an interesting post Captain Ham Man.

Loads of contractors put all manor of IT hardware from tablets upwards down as a business expense and justify it as getting acquainted with the technology and in my mind these are dubious but acceptable expenses.

In my case, I am about to land a contract where the job spec looked for the skill I was training in so I am going to insist that we run it through the business as an allowable expense.

[SueEllen]

... and an interesting post Captain Ham Man.

Loads of contractors put all manor of IT hardware from tablets upwards down as a business expense and justify it as getting acquainted with the technology and in my mind these are dubious but acceptable expenses.

Why is it dubious?

It may be dubious for you as you have no need to write notes in meetings or write/test applications that have a web interface and can be used on tablets. However for someone else, even if they are on your team, they are going to have a different set of skills.

In my case, I am about to land a contract where the job spec looked for the skill I was training in so I am going to insist that we run it through the business as an allowable expense.

Fair enough.

Personally I would change accountants to one that understood that IT courses and certifications that aren't degrees plus a few other courses can be claimed by someone who works in IT as a business expense.

[lithium147]

Loads of contractors put all manor of IT hardware from tablets upwards down as a business expense and justify it as getting acquainted with the technology and in my mind these are dubious but acceptable expenses.

Just build your own IOS app and publish it in the app store.
Then to write the app, you need a mac (mac book pro)
Then to test the app, you need:
- ipad 1/2/3/mini
- iphone 5/4S/4/3S/3

[northernladuk]

Just build your own IOS app and publish it in the app store.
Then to write the app, you need a mac (mac book pro)
Then to test the app, you need:
- ipad 1/2/3/mini
- iphone 5/4S/4/3S/3

Delboy of the contractor world has spoken.

[captainham]

Delboy of the contractor world has spoken.

Delboy knows he is taking the mick, I think this guy is actually serious in what he writes...

[speling bee]

This isn't that relevant though. Employers can put employees through any number of courses to grow them as an asset to the company. This doesn't mean it is allowable for tax purposes. What companies do isn't directly related to what we can do. We don't know how they handle it tax wise and the size of the company makes it easier to swallow (or hide).

Nonsense. We all know what these companies do. Our Ltd's are also companies.

Have a look at: Employment income: work-related training: excluded expenditure/apportionment of costs

Excluded expenditure
An employer's expenditure will not qualify for exemption under Section 250 ITEPA 2003 (see EIM01210) if, or to the extent that, its purpose is to:

provide facilities or benefits for entertainment or recreational purposes which are not in any way connected with acquiring the knowledge, skills, or personal qualities which satisfy the definitions of work-related training. So normal meals, refreshments and leisure activities offered within a training course are not taxable.
reward the employee for performing, or performing in a given way, the duties of his/her employment
provide an employment inducement which is not in any way connected with acquiring knowledge, skills, or personal qualities which satisfy the definitions of work-related training. For example safe-driver training, taken up by those with a company car, would qualify whereas an evening at the go-kart track would not. Generally, work related training offered as part of the normal recruitment process is unlikely to be a taxable inducement. But the more abnormal the training offer, in nature or amount, the more likely it is that the provider intended the provision as an inducement.

I think it needs to be pretty egregious to be excluded. We need to think like real businesses rather than semi-tax-dodgers terrified of being 'caught'. If I wanted to do a conversational Spanish course for my holidays, I wouldn't put it through. If I had a contract that required me to brush up my Italian, then I would put a business Italian course through the books. Becuase I need to to run my business.

[Wanderer]

We all know what these companies do. Our Ltd's are also companies.

Yes, but the difficulty is that a big company spending money on training courses has a potentially negative impact the company's bottom line profit whereas a one man limited company putting it's director through a training course is directly benefiting the director and reduces the net tax paid.

For a large company there will be careful consideration of the cost/benefit of staff training but for a one man LTD company it's a no brainer because the director benefits and gets tax relief on the cost of the training.

Personally, I think that allowing tax relief on training would be the right thing to do (so long as it's not a jolly) but HMRC think otherwise.