Reply to: Training and Exam Fees via LTD

[TykeMerc]

Just one quick query on Training

Can you claim for tuition fees, books and travel on an MSc undertaken 8 years ago prior to trading in a ltd company, but the MSc is directly linked with the work i now do........is this something I can claim for?

I don't see how it could be allowable.

[happydays1]

Just one quick query on Training

Can you claim for tuition fees, books and travel on an MSc undertaken 8 years ago prior to trading in a ltd company, but the MSc is directly linked with the work i now do........is this something I can claim for?

[TheFaQQer]

I'm concentrating on rather more esoteric BA skills training now.

Like saying "I ain't gettin' on no plane" and "I pity da fool"

[cojak]

then again I'm not doing ITIL training any more - the fees and compelxities of qualification levels are a serious rip-off.

WMS with bells on.

There's a new edition of the books later in the year which will run into the £100's. I (or rather my company) will pay for that but ITIL training for me has now ended.

I'm concentrating on rather more esoteric BA skills training now.

[Boo]

So if I decide to do a TOGAF or ITIL course to get better-paying project management contracts, my understanding is that it is NOT allowable unless I am already in a contract that needs those skills. Except, of course, I cannot get such a contract without those skills.

That's not my reading of the phrase "Provided it is incurred wholly and exclusively for the purposes of the trade carried on by the individual at the time the training is undertaken".

ISTM that the fact that you are between contracts is entirely irrelevant to the trade you are carrying out. If you last contracted as a SW Engineer and your next contract is expected to be in the same field then you are certainly trading as a SW Engineer between times too, why ever not ? Does a shopkeeper cease to be a shopkeeper when there are no customers in the shop ?

And my decision to renew my PRINCE2 just before Xmas when I was on the bench means I cannot claim the cost. Despite it being an updating of an existing skill which I need to continue getting public sector project management contracts.

This is just wrong and contradicts the quote you yourself gave : "In considering the question of purpose, you should not take an unduly narrow view of whether the content of any particular course only up-dates existing skills of the individual."

I read this to mean that it is unnecessary for the course to be a narrow updating of an existing skill eg from C++ to C++0x but that if it enhances the prospects of finding work in the current trade (eg as a SW Engineer) then it is allowable. So if you are an experienced SW Engineer and are sometimes asked to take on leadership or mentoring roles then it is certainly allowable to take a course in team leading or project management so long as it relates to SW Engineering. A course called "Advanced Team Building for Veterinarians" would likely raise a red flag though

ISTM the only things you can claim legitimately for are:
- to re-do qualifications you already have, and this must be done while in a contract;
- to get training in subjects needed for your existing contract which you got by lying about existing skills.

This is just wrong and is not supported by the wordage you posted in support. In fact what you quoted flat contradicts your conclusions.

But my stand-up argument to HMRC is: "I am an all-rounder IT professional and can turn my hand to anything and frequently do. I need to keep up to date with the relevant technology, working practices and standards to be able to do my job as a hands-on project manager implementing entire systems. Ergo, any IT-related course is relevant."

I don't know if *any* IT-related course would be allowable but I agree that many would and I think the wording you quoted actually supports that.

Boo

[jmo21]

Sod it, I'm with RichardCranium on this. If it's related to something I'm going to do for work then it's claimable.

Even if it's not related to something I've actually done in the past then I'm still claiming it. I mean, if I had no PM experience and I decided to do a PRINCE2 course, who's to say that I'm not going to change direction a bit?

If I was planning to have an extension built on my house and I decided to take a carpentry course then that would look a bit suspect for sure. But anything vaguely related to computing or running a business is fair game in my book.

+1

[Wanderer]

Personally, I put all work-related training through the books; regardless of the accountant's advice or HMRC's rules. It's wrong but I do it anyway.

Sod it, I'm with RichardCranium on this. If it's related to something I'm going to do for work then it's claimable.

Even if it's not related to something I've actually done in the past then I'm still claiming it. I mean, if I had no PM experience and I decided to do a PRINCE2 course, who's to say that I'm not going to change direction a bit?

If I was planning to have an extension built on my house and I decided to take a carpentry course then that would look a bit suspect for sure. But anything vaguely related to computing or running a business is fair game in my book.

[escapeUK]

Pretty sure...

Working or benched, I'm still primarily a senior PM with ITIL expertise, so Prince., PMP, ITIL, TOGAF, whatever are all in scope, whereas .NET or infrastructure training isn't.
then again I'm not doing ITIL training any more - the fees and compelxities of qualification levels are a serious rip-off.

I thought you were an IT professional running your own IT company. As such surely any IT / business related training would be allowable. I think it would also be a bit strange to expect HMRC to know that .net wasnt related to ITIL.

[NotAllThere]

Provided it is incurred wholly and exclusively for the purposes of the trade carried on by the individual at the time the training is undertaken (so you must be in a relevant contract and not on the bench),

When I'm on the bench, I'm still employed by my ltdco, and still therefore carrying on my trade. Same as a consultant for bigco can be sent on a training course while not on project.

Otherwise we'd be in the situation where when we're on a training course, we're not carrying out our trade, so it isn't claimable... I think many accountants are overly cautious of their reading of the rule. And that's fine. It's their job to spell out the dangers. But as directors, it's our responsibility to follow, or ignore their suggestions.

[jmo21]

Are you confident that statement is 100% correct? I don't think it is what the rules say.

"BIM42526 - Specific deductions: administration: own training courses" says (with my notes in red):

So if I decide to do a TOGAF or ITIL course to get better-paying project management contracts, my understanding is that it is NOT allowable unless I am already in a contract that needs those skills. Except, of course, I cannot get such a contract without those skills.

And my decision to renew my PRINCE2 just before Xmas when I was on the bench means I cannot claim the cost. Despite it being an updating of an existing skill which I need to continue getting public sector project management contracts.

ISTM the only things you can claim legitimately for are:
- to re-do qualifications you already have, and this must be done while in a contract;
- to get training in subjects needed for your existing contract which you got by lying about existing skills.

The only way to sneak anything new in past the HMRC rules above is to go on a skills updating course where some of the content is new to you, e.g. "PRINCE2 in an ITIL environment" or "Database Administration Advanced: using PL/SQL"



But my stand-up argument to HMRC is: "I am an all-rounder IT professional and can turn my hand to anything and frequently do. I need to keep up to date with the relevant technology, working practices and standards to be able to do my job as a hands-on project manager implementing entire systems. Ergo, any IT-related course is relevant."

While you are on the bench, you are currently working on your own project right?

Even if you are a PM and not actually doing any building, you can be currently putting together the project plan, writing documents, sourcing people to do work etc etc etc?

[malvolio]

Are you confident that statement is 100% correct? I don't think it is what the rules say.

Pretty sure...

Working or benched, I'm still primarily a senior PM with ITIL expertise, so Prince., PMP, ITIL, TOGAF, whatever are all in scope, whereas .NET or infrastructure training isn't.
then again I'm not doing ITIL training any more - the fees and compelxities of qualification levels are a serious rip-off.

[craig1]

Is that bit on only claiming while in contract correct? Surely when a company director is "on the bench" his trade remains the same and is still "employed" by his company. I'm a project manager whether I'm actively employed by a client or not and that's my main trade. It would be incredibly narrow if HMRC took the view that I was no longer a project manager when on the bench but still working for my company and I'd be sure that even a part-way competent lawyer would be able to challenge it successfully. That said, tax law is not common sense and I may be talking out of my bottom.

On the narrow scope of training, I agree with the points above that it's daft.

[TykeMerc]

It's a fairly absurd situation that like many tax rules appears to be subject to that most dreaded of all tax problems interpretation.
All you need is some moronic HMRC inspector to interpret the rules differently and there's hell (and tax) to pay.

I'm also a PM/Programme Manager and my Prince2 is about to expire, I fully intend to book a hothouse course and exams to renew it and shove the costs through the books. I also intend to do the MSP stuff.
I agree as Project Managers we have the weird situation of being able to argue; with reasonable justification; that technical skills come in handy and things like ITIL can also fall under the PM banner. In my case I've had to implement fair chunks of ITIL (config management systems for instance) so understanding ITIL and its processes could be argued to be a requirement.

Let's face it the rules are a farce.

[RichardCranium]

The rule is actually very simple. If the result of the course leads to a direct, work-related improvement in your potential income, it's allowable.

Are you confident that statement is 100% correct? I don't think it is what the rules say.

"BIM42526 - Specific deductions: administration: own training courses" says (with my notes in red):

Provided it is incurred wholly and exclusively for the purposes of the trade carried on by the individual at the time the training is undertaken (so you must be in a relevant contract and not on the bench), expenditure on training courses attended by the proprietor of a business (either as a sole trader, or in partnership with others) with the purpose of up-dating their skills and professional expertise is normally revenue expenditure, which is deductible from profits of the business.

Business purpose test
In considering the question of purpose, you should not take an unduly narrow view of whether the content of any particular course only up-dates existing skills of the individual. But if it is clear that, for example, a completely new specialisation or qualification (e.g. adding a new programming language or going from DBA to programmer or gaining PRINCE2 or ITIL) will be acquired as a result of the expenditure, it is unlikely that the expenditure will be wholly and exclusively for the purposes of the existing trade.

So if I decide to do a TOGAF or ITIL course to get better-paying project management contracts, my understanding is that it is NOT allowable unless I am already in a contract that needs those skills. Except, of course, I cannot get such a contract without those skills.

And my decision to renew my PRINCE2 just before Xmas when I was on the bench means I cannot claim the cost. Despite it being an updating of an existing skill which I need to continue getting public sector project management contracts.

ISTM the only things you can claim legitimately for are:
- to re-do qualifications you already have, and this must be done while in a contract;
- to get training in subjects needed for your existing contract which you got by lying about existing skills.

The only way to sneak anything new in past the HMRC rules above is to go on a skills updating course where some of the content is new to you, e.g. "PRINCE2 in an ITIL environment" or "Database Administration Advanced: using PL/SQL"



But my stand-up argument to HMRC is: "I am an all-rounder IT professional and can turn my hand to anything and frequently do. I need to keep up to date with the relevant technology, working practices and standards to be able to do my job as a hands-on project manager implementing entire systems. Ergo, any IT-related course is relevant."

[TOSH1]

I work with CISCO and was hoping to complete my CCNP, and possibly move onto CISCO VOICE as well as PRINCE 2 via LTD.