I am slightly cconfused as to the rules of when Training is an allowable cost for tax purposes, although I think I understand the underlying rules.
Here are some examples below:
Sole Trader
1.) Refresher training for CPD for example - this appars that it is allowable
2.) Learning to become a drving instructor - this appears to be a new skill and therefore is not allowable.
Limited Company
1.) A director is asked to undertake an MBA as part of the job role - it is a company with only 2 directors - I am unsure as to whether this is allowable or not. Also, If it is not allowable then why is it in large companies like banks or insurance companies.
2.) An employee wants to undertake a course for 3 years (say ACCA) so that they can become a partner - is this allowable if they aim to use it to own a part of the company?
think that your missing HMRC's reasoning on this one. The rules are based around necessity. For example, CPD is neccessary to keep doing the role that you currently perform but the train for something else such as ACCA is to aspire to a new position.
To get tax relief the training has to be a necessary cost. Training to change roles is not necessary.
Lets take an example using ICB.
People want to become bookkeepers so they sign up with the ICB. You are not however working as a bookkeeper when you sign up and nothing stops you from acting as a bookkeeper until you sign up.
Then, as a student of the ICB you can't start your own practice until you reach ICB level II. Pass ICB level II, set up in business as a bookkeeper and then you can put further ICB training (self assessment, payroll) as expenses as you will not be able to perform those parts of a role that you are already in without the relevant bits of paper. (don't quote me but make your own mind up on that one as HMRC may see that one quite differently)
That follows with big business in that you will be working as an accountant or in an accounts related role under the supervision of an accoutant whilst you train so it's allowable.
A director taking an MBA. I would say that one would not be allowed as it is not neccessary for the director to have an MBA to do their job (if that was the case the senior management of many large companies would be wiped out in one foul swoop).
If someone want to become a partner then why should the company train them in something that it would not train them in anyway in order to become a partner? The training is not necessary for the role that they are doing at the moment, only the role that they aspire to. This is not an allowable expense.
sure someone will disagree with me on this.
P.S. ACCA, three years... ha, ha, ha, ha......
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Shaun
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