Reply to: Newbie - validity in expensing CFA

[LisaContractorUmbrella]

What is the key difference between Section 250 and Section 336, when related to paying for training that satisfies the 'work-related training' definition. It would be nice to have some insight before I call them once more.

Thanks!

Here you go

Employment income: further education and training costs: introduction

[PEEL]

Other expenses: education and training: education costs

This is what HMRC have to say on the matter

What is the key difference between Section 250 and Section 336, when related to paying for training that satisfies the 'work-related training' definition. It would be nice to have some insight before I call them once more.

Thanks!

[mudskipper]

If you're tending towards not claiming anyway, why not phone HMRC's helpline and ask them if it's claimable? If they say no, you're no worse off, if they say yes, you're ££££ in.

[northernladuk]

Thanks. I imagine in that case that the HMRC would know that the CFA designation and associated costs are not suitable for any single contractor (because the scope of the course is so large), with the exception being fundamental research. I shall not put it through my accounts.

As to your aside, I have looked into IR35 and I did have my contract checked (by Accountax). Also looked at working practices. And I have a PCG + subscription. The whole thing smells a bit like fear-mongery given the way in which I do my job, but thought it better to make sure anyhow.

Ok, well seems your working practices are outside, the contract is outside, the only weak link in the chain is you so need to sort that out. Don't use permie phrases or else you are going to undo all the work that your working practices and contract says and personally put yourself at risk. You are a supplier now, not an employee.

[PEEL]

There is but the general rule with HMRC is wholly and exclusively else they might as well open the gate to everything going and spend more trying to argue it. HMRC and HMIT are a dab hand at this. They will know exactly what is allowable, what questions to ask. They are not daft and it is their job to know what is and isn't. Your argument fails if you think about a DBA taking an ITIL course. He is an IT professional working in an IT environment. That doesn't mean the course is for his current trade. Your argument is far to generic to pass. It is for you and your services, not the entire vertical.

Just on a side not. Do you know about IR35 and had your contract checked? You used the words 'job' and 'assignment'. These are permie terms not contractor ones. You run a business selling skills to your client. It isn't a job or an assignment. Iceberg affect going on here and a re-think of your situation required?

Thanks. I imagine in that case that the HMRC would know that the CFA designation and associated costs are not suitable for any single contractor (because the scope of the course is so large), with the exception being fundamental research. I shall not put it through my accounts.

As to your aside, I have looked into IR35 and I did have my contract checked (by Accountax). Also looked at working practices. And I have a PCG + subscription. The whole thing smells a bit like fear-mongery given the way in which I do my job, but thought it better to make sure anyhow.

[TheFaQQer]

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.

Generally, permies get sent on courses because the company already has the work. If you already have the work, then getting the training isn't a benefit.

If you are doing the training because you might get work as a consequence of having the training, then it's a benefit because when you take the training there is no need for the business to pay for it.

I guess in this case the argument comes down to whether the training amounts to a new skill - if it does, and there is no work requiring this when the training is taken, then you can't claim it. If it is a new skill and there is already a confirmed piece of work, then you can claim it. If it's not a new skill, then claim it.

[LisaContractorUmbrella]

Other expenses: education and training: education costs

This is what HMRC have to say on the matter

[northernladuk]

Surely there are fringe benfits to every course? Even though a course may cover 100% of a current assignment and no more, there is benefit to be had from retaining that knowledge that the course offers AFTER the assignment has ended. I will probably not expense it, which is a shame because I am taking the course because it will help me in my job. It is also the most appropiate course to take for someone in my position.

What are the chances of HMRC looking into the whole scope of the course? I mean, surely they look at the employment type of 'financial services' and see it is the most widely accredit course in 'financial services' and think that the two belong hand-in-hand? It was naive of me to assume that I wouldn't fall in to a grey area whilst contracting.

There is but the general rule with HMRC is wholly and exclusively else they might as well open the gate to everything going and spend more trying to argue it. HMRC and HMIT are a dab hand at this. They will know exactly what is allowable, what questions to ask. They are not daft and it is their job to know what is and isn't. Your argument fails if you think about a DBA taking an ITIL course. He is an IT professional working in an IT environment. That doesn't mean the course is for his current trade. Your argument is far to generic to pass. It is for you and your services, not the entire vertical.

Just on a side not. Do you know about IR35 and had your contract checked? You used the words 'job' and 'assignment'. These are permie terms not contractor ones. You run a business selling skills to your client. It isn't a job or an assignment. Iceberg affect going on here and a re-think of your situation required?

[PEEL]

That is a pretty flawed argument. Permies go on courses for career development to get them ready for new positions and progress through the company. This means it is relevant for their career progression, future work and fringe benefits to what they do now but not wholly for the one they are doing, which is exactly what HMRC state when advising what is and isn't claimable.

Surely there are fringe benfits to every course? Even though a course may cover 100% of a current assignment and no more, there is benefit to be had from retaining that knowledge that the course offers AFTER the assignment has ended. I will probably not expense it, which is a shame because I am taking the course because it will help me in my job. It is also the most appropiate course to take for someone in my position.

What are the chances of HMRC looking into the whole scope of the course? I mean, surely they look at the employment type of 'financial services' and see it is the most widely accredit course in 'financial services' and think that the two belong hand-in-hand? It was naive of me to assume that I wouldn't fall in to a grey area whilst contracting.

[northernladuk]

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.

That is a pretty flawed argument. Permies go on courses for career development to get them ready for new positions and progress through the company. This means it is relevant for their career progression, future work and fringe benefits to what they do now but not wholly for the one they are doing, which is exactly what HMRC state when advising what is and isn't claimable.

[northernladuk]

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.

[mudskipper]

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.

[Dominic Connor]

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.

[PEEL]

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.

[LisaContractorUmbrella]

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