Newbie - validity in expensing CFA

**Sockpuppet** · 8 July 2013, 21:30

What does your accountant say?

Usually expensing training is a no if its for a new area of business. I've expenses a lot of training over the years through and the accountant has always been happy with it, but a lot of it was health and safety training so easier to justify.

**PEEL** · 8 July 2013, 21:44

Hi SockPuppet, thanks for the response.

My accountant just iterated that if the expense is designed to teach a new skill or develop a new area of expertise then it is not allowable to offset against Corp Tax. I guess what I really want to know is would HMRC kick up a fuss about somebody involved in the financial markets, at a financial institution, expensing a course that is designed for financial professionals (even if the course covers much more than the job day-to-day work)? I guess I will just err on the side of caution and not expense it.

Alas, it would have saved me 1000 pounds or so...

**northernladuk** · 8 July 2013, 22:21

Originally posted by PEEL View Post

Hi SockPuppet, thanks for the response.

My accountant just iterated that if the expense is designed to teach a new skill or develop a new area of expertise then it is not allowable to offset against Corp Tax. I guess what I really want to know is would HMRC kick up a fuss about somebody involved in the financial markets, at a financial institution, expensing a course that is designed for financial professionals (even if the course covers much more than the job day-to-day work)? I guess I will just err on the side of caution and not expense it.

Alas, it would have saved me 1000 pounds or so...

It's a 5k course? Did it actually help you get your contract gig or was it is personal thing to know your clients business? Thing is your are an IT professional which is where it falls down I guess. I don't know about London but up here in the North you will swap verticals all the time. There doesn't seem to be enough work to go end to end in one sector long term. Gonna be hard pressed to explain it to HMRC a year down the line when you are in a different sector I guess.

**northernladuk** · 8 July 2013, 22:40

Originally posted by PEEL View Post

- Finally, off the topic listed in the subject, is there any benefit of favourable viewing by HMRC in paying myself a salary as a director? I have already reached my personal allowance threshold and so I understand there is no real saving to be had in improving tax efficiency, but I wondered if not paying a salary would cast suspicion. I used the search function but failed to come up with something exact.

Plenty of discussions on this. I think every contractor has this in their first year. Search below comes up with a number of threads and you can play with the search term a bit...

https://www.google.co.uk/search?q=pe...hrome&ie=UTF-8

**LisaContractorUmbrella** · 9 July 2013, 07:14

IMHO you would be very hard pushed to get this one past HMRC - I would stick with erring on the side of caution

**PEEL** · 9 July 2013, 08:23

Originally posted by northernladuk View Post

It's a 5k course? Did it actually help you get your contract gig or was it is personal thing to know your clients business? Thing is your are an IT professional which is where it falls down I guess. I don't know about London but up here in the North you will swap verticals all the time. There doesn't seem to be enough work to go end to end in one sector long term. Gonna be hard pressed to explain it to HMRC a year down the line when you are in a different sector I guess.

I am not an IT contractor, I work in what is called Middle Office - it is in between the people doing all the trading and the people doing settlements and confirmations (it is halfway to being a good job and one which there are an increasing # of contractors). HR pay for the course for permie people in my position, but obviously not for contractors. It's very relevant, but just not all of it. Because the expense is quite large (5k for the remaining two levels) I would like to include it, but at the same time I guess it is not worth being trapped in a grey area.

Thanks for the help. I did try and call HMRC but that didn't yield anything useful.

**Dominic Connor** · 9 July 2013, 08:53

It's not a new line of business

I would not see it as a "new line of business".

If your client is a bank, then understanding their business is worth real money to you quite quickly. I'd see the payback time as 18months upon completion, in terms of a higher chargeable rate and/or reducing the chances of not having a client willing to pay you.

Knowledge of clients business is always worth a few quid, in banking more so.

This needs to be presented as training for your activities as business consultant.

Even if HMRC disallow it, the CFA is probably worth doing, though it will take long to break even on the investment. From watching people's careers both permie and freelance, a failure to maintain your basic capital asset, your skills, is the biggest reason for a bumpy ride as they get older and/or the market drifts away from them.

I have to declare an interest here. Although I'm a City headhunter I also teach C++ at the largest provider of CFA training in the UK, though not to CFA students.

**mudskipper** · 9 July 2013, 09:24

Originally posted by PEEL View Post

I am not an IT contractor, I work in what is called Middle Office - it is in between the people doing all the trading and the people doing settlements and confirmations (it is halfway to being a good job and one which there are an increasing # of contractors). HR pay for the course for permie people in my position, but obviously not for contractors. It's very relevant, but just not all of it. Because the expense is quite large (5k for the remaining two levels) I would like to include it, but at the same time I guess it is not worth being trapped in a grey area.

Thanks for the help. I did try and call HMRC but that didn't yield anything useful.

I'd argue that if the course is relevant for permies in your position, then it's relevant for you. If you're intending to stay in finance long term, then I'd feel inclined to expense it.

**northernladuk** · 9 July 2013, 09:47

Originally posted by PEEL View Post

I am not an IT contractor, I work in what is called Middle Office - it is in between the people doing all the trading and the people doing settlements and confirmations (it is halfway to being a good job and one which there are an increasing # of contractors). HR pay for the course for permie people in my position, but obviously not for contractors. It's very relevant, but just not all of it. Because the expense is quite large (5k for the remaining two levels) I would like to include it, but at the same time I guess it is not worth being trapped in a grey area.

Thanks for the help. I did try and call HMRC but that didn't yield anything useful.

Ah ok... and are you stuck in this line of work? Will you expect to take other contracts outside of finance if there are no ones available like the one you are on?
Just because a bit of it is relevant isn't enough IMO. Open University do modules that might be relevant to my work, that doesn't mean the whole degree can be claimed. Luckily OU is module based so you can expense the relevant ones (if any). Many courses could have an element or relevancy but as a whole not be claimable so they have to draw the line somewhere. The aims of the course are not wholly relevant so that would be the answer IMO.

Newbie - validity in expensing CFA