Reply to: Training a new employee

[Dante]

I think that for them to be allowable for tax relief they have to be enhancing a current skill rather than retraining in another...

Precisely how the revenue can know what skills you have and don't have is beyond me.

Why not just 'purchase online' some CBT's. A much safer and cheaper option and she can do them as life allows. For MS Office apps and such like they are fine.

[pmeswani]

Well, if that's really the case then the answer to the original question ("Could I employ her, send her on a load of courses using company money, then sack her?") is: No.

Which is what people have been saying all along, but I have spoon fed the info. Sorry, having am having a bad day. I didn't get a contract with RBS. Would have got me off the bench.

[dang65]

You have to demonstrate that the employee has added some value to the business prior to the training and after the training. If you can't prove it, then what are you going to do?

Well, if that's really the case then the answer to the original question ("Could I employ her, send her on a load of courses using company money, then sack her?") is: No.

[pmeswani]

If its only an Office course - and therefore presumably not a lot of money - is it really worth the hassle - the tax savings may not be very much anyway.

Or, if it is expensive, can she not get a training grant from the local enterprise company?

www.cvision.co.uk has some useful CBT courses. http://www.cvision.co.uk/search.aspx?key=office

Fairly cheap as well.

[Alan @ BroomeAffinity]

If its only an Office course - and therefore presumably not a lot of money - is it really worth the hassle - the tax savings may not be very much anyway.

Or, if it is expensive, can she not get a training grant from the local enterprise company?

[pmeswani]

???

I'm talking about Microsoft Office courses. These would be required to gain the skills to create invoices, expenses spreadsheets etc. That's as relevant to my business as it is to any other business which sends its employees on such courses.

It doesn't have to be relevant to the current work or clients does it? I mean, people here go on re-skilling training courses which don't have anything directly to do with current work. They are investments towards future growth and revenue.

As I said.... Relevant to the business or the client. One or the other or both. However, if she is employed, went on the courses and then left, how would it be beneficial to the business or the client? The HMRC would look upon the training as a method of, as already stated by another poster, Tax Evasion. You have to demonstrate that the employee has added some value to the business prior to the training and after the training. If you can't prove it, then what are you going to do? Find some other excuse?

[dang65]

Yes, but clearly from the context and content of your posts, the only reason you are sending her on the course as an "employee" of the company is so you can get the tax relief on it.

And if its obvious to us - it'd be obvious to the tax man during an investigation.

But she would be an employee, not an "employee". What actually decides this anyway? Is there a law, or is it down to how paranoid the tax man is feeling on a particular day? I'd have said that employee training was a perfectly legitimate expense.

[dang65]

It can also be argued that the training courses she is going on may not be relevant to the business or to the work you are currently doing for the client.

???

I'm talking about Microsoft Office courses. These would be required to gain the skills to create invoices, expenses spreadsheets etc. That's as relevant to my business as it is to any other business which sends its employees on such courses.

It doesn't have to be relevant to the current work or clients does it? I mean, people here go on re-skilling training courses which don't have anything directly to do with current work. They are investments towards future growth and revenue.

[pmeswani]

Yes, but clearly from the context and content of your posts, the only reason you are sending her on the course as an "employee" of the company is so you can get the tax relief on it. If thats the case then its tax evasion and its also in breach of company legislation as you would not to be acting in the best interests of the company as is your duty as a director.

And if its obvious to us - it'd be obvious to the tax man during an investigation.

It can also be argued that the training courses she is going on may not be relevant to the business or to the work you are currently doing for the client.

[Alan @ BroomeAffinity]

I'm hardly ignoring the answer am I. I'm still not clear about how it wouldn't be legit, that's all.

OK, so it could be a pre-planned scam in the way I'm proposing, but it could just as well be genuine. I know it's HMRC we're talking about here, but even they must give some kind of benefit of the doubt or else none of us would be able to do anything without the risk of being pulled up on it. I suppose everyone will say that is the case, but you know what I mean. Some situations are unforseeable, including an employee changing their mind and going to work somewhere else.

Yes, but clearly from the context and content of your posts, the only reason you are sending her on the course as an "employee" of the company is so you can get the tax relief on it. If thats the case then its tax evasion and its also in breach of company legislation as you would not to be acting in the best interests of the company as is your duty as a director.

And if its obvious to us - it'd be obvious to the tax man during an investigation.

[dang65]

Why don't you just not ask the question if you're going to ignore the answer?

I'm hardly ignoring the answer am I. I'm still not clear about how it wouldn't be legit, that's all.

OK, so it could be a pre-planned scam in the way I'm proposing, but it could just as well be genuine. I know it's HMRC we're talking about here, but even they must give some kind of benefit of the doubt or else none of us would be able to do anything without the risk of being pulled up on it. I suppose everyone will say that is the case, but you know what I mean. Some situations are unforseeable, including an employee changing their mind and going to work somewhere else.

[BrilloPad]

HMRC do seem to get a bit hot under the collar about "connected persons". You'd probably fall foul of that.

"Honest, m'lud, it wasn't a totally artificial situation, designed to avoid paying tax".

They get hot under the collar about most things.

[NotAllThere]

HMRC do seem to get a bit hot under the collar about "connected persons". You'd probably fall foul of that.

"Honest, m'lud, it wasn't a totally artificial situation, designed to avoid paying tax".

[Alan @ BroomeAffinity]

The only problem is having posted the idea on here. But it's only a hypothetical question anyway.

Why don't you just not ask the question if you're going to ignore the answer?

[dang65]

That's the rule for what is a business expense, isn't it?

In the event of any expenses investigation, you'll need a VERY good justification and plot to get away with it.

Why does the justification have to be VERY good? I'm talking about standard training courses which probably thousands of employees are sent on every year. I even did one myself a few years ago.

The fact that she would finish the course and then get sacked... well, she could simply hand in her notice because she'd been offered another job and I'd reluctantly have to let her go, muttering under my breath about the wasted training costs. Same as any company would, including the armed forces who have people walk out just as they finish two years of specialist training, or whatever.

The only problem is having posted the idea on here. But it's only a hypothetical question anyway.