Reply to: Are books tax deductible?

[poppy01]

bit tired of this thread, can we wrap it up.

question, can you put those big computer books thru as an expense.
if you are limited - yes do it, reference material used to do the job.
if you are an employee(ir35 caught?) - seems more problematic, but cant see how tax people would know the difference between training and reference material, so , yes , allowable given you tell em the right thing.

what are the chances you'd get caught anyway, and what would be the additional tax, a tenner?

forget about it

[Platypus]

The expenses should be wholly, exclusively and necessary for business. A large company will have a library, kitchen with refeshments and a TV in breakout room but if you are claiming your kitchen fittings, lounge and TV etc as business expenses then you are taking the p!$$

Agree - sorry I wasn't suggesting claiming a domestic kitchen as a business expense. But everything in the office area of a home-based business (desks, lamps, bookshelves, etc) can be claimed.

[ASB]

all I am saying is that if the person is buying books as an employee there are stiff tests to be overcome before having the expense allowed against their earnings from employment - don't expect HMRC to be over generous ... but if a business buys the books then the rules are much more relaxed.

Quite. I think that is the key point.

ASB goes and buys Vista for Cretins; not claimable as an expense. ASBco goes and buys it because it is considering moving towards Vista then probably OK as a business expense.

Petty cash can be a wonderful thing and get round the problem of the business not having an account with Waterstones or similar.

[blacjac]

So my earlier exapmle was wrong?:

If I understand you correctly Bob, then my company can't buy a "Learning Java" book for an employed developer, but my company could employ a trainee developer and buy a "Learining Java" book for them, as the very nature of their job is to learn to be a programmer.

Is that correct?

And what is correct is that I cannot buy myself a "Learning Java" book and claim it as an expense, without it being a BIK, however my company can buy itself a "Learning Java" book and then allow me to use it....


Makes sense (kind of - but that's HMRC )

[Bob Jones]

That's part of where I get confused - the difference between an employment expense and a business expense.

An employment expense has to be wholly exclusively and necessarily in the performance of the duties of the employment.

A business expense has to be wholly and exclusively for the purpose of the trade.

Note the latter has no "necessary" requirement nor does it have to be in the performance of the trade.

It is possible therefore for a business to be allowed an expense that would not be allowable if the person was an employee and this is where differences of opinion can arise because the problem is approached from two different directions.

The original question was

Those big expensive computer books... can I put them down as an expense or a capital allowance?

which I took to be a person in employment. With limited information it is impossible to come up with a defnitive answer - all I am saying is that if the person is buying books as an employee there are stiff tests to be overcome before having the expense allowed against their earnings from employment - don't expect HMRC to be over generous ... but if a business buys the books then the rules are much more relaxed.

Bob

[xoggoth]

Agree with last two

[swamp]

...the expense has to be incurred "wholly exclusively and necessarily in the performance of the duties of the employment". If a book puts you in a position to do the job then that expense is not in the performance of the duties

I'm a software developer and I can do most software development jobs (to some degree or other). Any software book is not going to "put me in a position" to do the job because I already can "do the job". Therefore any software book is an allowable expense for me so long as it is necessary for the performance of my duties.

Now I don't know any German and if I decide I want to be a German translator instead of a developer I can't put 'Learn German on The Bus' through the books because that would put me in a position to do the job. However, if it was necessary for me to develop software with a German client then this book would be OK to expense.

[frank size]

The expenses should be wholly, exclusively and necessary for business. A large company will have a library, kitchen with refeshments and a TV in breakout room but if you are claiming your kitchen fittings, lounge and TV etc as business expenses then you are taking the p!$$

[Platypus]

My God there are some silly answers in this thread.

IME almost all books (barring fiction) are allowable, as R&D, training materials or reference books.

Think how a real business works: they have libraries, pictures on the wall, coffee machines, a rest area with a TV, and so on.

You can do this too. Just because you're small doesn't mean you can't act like a larger company. In fact, you should.

[SueEllen]

If I understand you correctly Bob, then my company can't buy a "Learning Java" book for an employed developer, but my company could employ a trainee developer and buy a "Learining Java" book for them, as the very nature of their job is to learn to be a programmer.

I'm confused as if the employed developer was skilled in languages similar to Java and was given Java work to do, then in the above case they wouldn't be allowed to buy a "Learning Java" book even though the book would both be a guide and a reference.

[blacjac]

If I understand you correctly Bob, then my company can't buy a "Learning Java" book for an employed developer, but my company could employ a trainee developer and buy a "Learining Java" book for them, as the very nature of their job is to learn to be a programmer.

Is that correct?

[NotAllThere]

Two reasons - one is that the test for expenses relating to employment are much more strict that those in business...

That's part of where I get confused - the difference between an employment expense and a business expense.

I understand that a diver can't buy a book "How to Dive". But can WeSink ltd by the book to stick on its bookshelf. Further, can WeSink ltd buy a "Advanced Diving Techniques" for its staff.

In my industry sector, the big consultancies (and indeed end-clients) buy their staff books, send them on training courses to learn new skills, or new technologies related to their existing skills., subscribe to journals which explain the latest techniques etc. Do they really not claim these against their corp tax?

[Bob Jones]

How on earth do largecos get away with having technical libraries for their staff?

Two reasons - one is that the test for expenses relating to employment are much more strict that those in business and second a technical library is likely to be used whilst doing the job and would qualify ... for example if I were to purchase a library of tax cases, that would be allowable (as capital allowances) as I would be using the library during the course of my day to day work .. but if I decided to branch out into another area of tax - say inheritance tax and I went on a course and purchased text books the expense would not be allowable as the whole package would be to put me in a position to perform that area of work ...
A driving instructor cannot the claim the cost of a book "How to teach driving" .. a writer cannot claim the cost of a book "All you need to know about writing skills" .... these are expenses that put the person in the position to do the job not incurred whilst doing the job.
There is a thin dividing line - text books that are used to attain a qualificaton can become the reference book of the future but if the claim really is "XML for dummies" then it has to be to put the person in a position and not incurred whilst doing the job.

Bob

[NotAllThere]

How on earth do largecos get away with having technical libraries for their staff?

Do they pay for them out of taxed income?

[Bob Jones]

see

http://www.hmrc.gov.uk/manuals/eimanual/EIM32530.htm

Bob