Reply to: Is training allowed as a expense through limited company ?

[Sockpuppet]

I did some first aid training and go myco to pay for it. I didn't need it, it was a new still but I reckon HMRC would allow it. I think this may be an exception to the rule though.

[psychocandy]

Red Hat certification exam £400 UK, $400 USA. Pity I cant get a flight for £100 LOL :-)

[Wanderer]

ooo, that's handy, combine it with a nice company sponsored trip home.

Hey come on, that's purely incidental! After all, how many conferences do you see which are hosted in Las Vegas etc....

Seriously though, as with TheFaQQer I've done courses abroad because even when you pay the flight and accommodation it can still be cheaper than the UK. The jet lag can be a bitch when you start falling asleep in class at 2pm but a few days to acclimatise before the course will work wonders.

[Wanderer]

This is a grey area. can anyone clarifiy if training is allowed if i am doing a course in my area of expertise ?

Yes, it is a bit of a grey area and as you can see there are some polarised opinions on the matter.

The relevant parts of the law from Income Tax (Earnings and Pensions) Act 2003 are paraphrased as:

ITEPA s250

No liability to income tax arises by virtue of the provision for an employee of work-related training or any benefit incidental to such training, or

(a) costs which are incidental to the employee undertaking the training,
(b) expenses incurred in connection with an examination or other assessment of what the employee has gained from the training, and
(c) the cost of obtaining any qualification, registration or award to which the employee becomes or may become entitled as a result of the training or such an examination or other assessment.

So if it's work related training/exams then it's allowable along with incidental costs (hotels, travel etc).


ITEPA s251 goes on to define work related training thus:

“Work-related training”, in relation to an employee, means a training course or other activity designed to impart, instil, improve or reinforce any knowledge, skills or personal qualities which—

(a) are likely to prove useful to the employee when performing the duties of the employment or a related employment, or
(b) will qualify or better qualify the employee to perform those duties

(2) For this purpose “related employment”, in relation to an employee, means another employment with the same employer, or with a person connected with the employer, which the employee—

(a) is to hold,
(b) has a serious opportunity of holding, or
(c) can realistically expect to have a serious opportunity of holding in due course.

HMRC's guidance is in BIM47080 and warns that where the employee is also the director there is a greater chance of the training being for their personal benefit rather than for the business but it certainly doesn't disallow it. Probably the biggest gotcha in BIM47080 is:

where an employer carries on more than one trade or profession, either at the same time or consecutively, expenditure on training, like other expenditure, for the purpose of one such business (or partly for its purpose) cannot be deducted in computing the profits of the other.

So if you undertake a training course to help you get your "plan B" part of the business off the ground, you can't claim the cost against the profits from your "plan A" business. However, if the training expense is directly related to your future business direction (eg, project management course so you can move from a tech support role into Project Management) would be allowable.


If you have a specific example then you could always call HMRC and ask them what they think....

[TheFaQQer]

Never totally understood the training rules to be honest...

Im guessing paying for a certification exam would be allowable though? £400 - cheers Red Hat. $400 in the USA.... :-(

I would think it's claimable.

I went to India to do my Oracle certified professional course - it was related to work that I already did, and was significantly cheaper to fly to Goa for three weeks than it was to go to Reading for the same course.

[stek]

Is training allowed as a expense through limited company ?

I've seen Bobs try this one a few times, training course cheaper back home, ooo, that's handy, combine it with a nice company sponsored trip home.

Of course, no way would I accuse the OP of considering that, this isn't General...

[northernladuk]

Never totally understood the training rules to be honest...

Im guessing paying for a certification exam would be allowable though? £400 - cheers Red Hat. $400 in the USA.... :-(

The training rules are pretty easy to understand IMO, the reasoning behind it is a little more questionable though. Guess they have to draw a fairly draconian line to stop the system being abused and as with any catch all rule some situations don't make sense. Just the way it is.

[psychocandy]

Never totally understood the training rules to be honest...

Im guessing paying for a certification exam would be allowable though? £400 - cheers Red Hat. $400 in the USA.... :-(

[northernladuk]

They're quote picky with my expenses. Part of the package is that they will deal with any HMRC equiries as long as they approve my expenses. For example they won't allow me to claim for lunch or coffees...

I hope they are quote[sic] as picky with your accounts as we are with your spelling

[Jog On]

Why would they?! They are only there to advise you on what they think is correct, ultimate responsibility lies with you, however HMRC on the other hand.....

They're quote picky with my expenses. Part of the package is that they will deal with any HMRC equiries as long as they approve my expenses. For example they won't allow me to claim for lunch or coffees...

[SimonMac]

I did all my Prince 2, ITIL, BA, Agile training through my LTD in between contracts. Accountant didn't have any issue with it.

I also sell trading courses as an affiliate through my websites and I've bought all of them to review them thoroughly. This is genuine plan B entrepreneurial activity through same LTD which is directly funded from contracting. Accountant is fine with this as well.

I think pigeon holing "directly applicable" skills and training to be able to do your "job" is the kind of thinking that gives LTD company contractors a hard time with hector.

Are you in business? Do you need to update and learn skills to maintain and grow your business? If so that's what a LTD co structure should help you achieve.

Why would they?! They are only there to advise you on what they think is correct, ultimate responsibility lies with you, however HMRC on the other hand.....

[northernladuk]

Remember of course you will still be paying 80% of the training cost out of your own pocket in the end. Just because it is going through the company doesn't make it free as some people seem to forget.

Also it is down to your attitude to risk. You could just bang it through and be ready to argue it in an investigation. Where I wouldn't condone breaking the rules there is a grey area created by people even though the rules are black and white. The guy investigating may just assume tech cert for a tech contractor isn't worth looking in to and you are away. A Masters Degree course for a .NET contractor will attract attention... so up to you and whether you want to put it through and are prepared to fight it later.

[Jog On]

I did all my Prince 2, ITIL, BA, Agile training through my LTD in between contracts. Accountant didn't have any issue with it.

I also sell trading courses as an affiliate through my websites and I've bought all of them to review them thoroughly. This is genuine plan B entrepreneurial activity through same LTD which is directly funded from contracting. Accountant is fine with this as well.

I think pigeon holing "directly applicable" skills and training to be able to do your "job" is the kind of thinking that gives LTD company contractors a hard time with hector.

Are you in business? Do you need to update and learn skills to maintain and grow your business? If so that's what a LTD co structure should help you achieve.

[network]

Ok so why do you need training to do something you are already doing? Did you blag to get the role?

Does this training course you are interested in invoke flying to India as well?

I didnt blag Stek. so you mean to say that if you do something you are an expert, is it ? wont you have the attitude to do things better ?

Does this training course you are interested in invoke flying to India as well ? Thats none of your business - if you want to help ,then post your comments, else dont waste everyone time reading your comment !!

[stek]

Is training allowed as a expense through limited company ?

Yes but without those materials / exam i cant do my job better. For instance, if i am doing a job in .net and buy materials to design in .net (which i am doing in my current job) then is this an allowable expense ? because i need this to perform my job better . i am not doing any course outside my area isnt it ?

Ok so why do you need training to do something you are already doing? Did you blag to get the role?

Does this training course you are interested in invoke flying to India as well?