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Post Info TOPIC: Training course as a pre-requisite to sales
fabs79


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Training course as a pre-requisite to sales
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Hi,

I know that training is not generally an allowable business expense when you are getting new skills. However I'm facing a peculiar scenario and I wanted to check the opinion of others on here.

My client is self-employed and providing her services to a big corporation that sells training packages (personal development and investments). She acts as a sales assistant (self employed), helping the company to sell their packages at conferences and invoicing them for her time. So far so good.

In order to engage her in this sales role the company required her to attend the training first (and pay for it. we are talking thousands!), so her attending the training was a requirement for being considered in her sales role. 

When I was doing bookkeeping for her I promptly disallowed these training expenses because she's not an investor and therefore all the investment training courses related to new skills. However there is also the argument that the company required her to take the training for her to be able to trade with them.

I'm not sure if the latter argument would have a leg to stand on with HMRC...

I hope I explained it well enough.   Any ideas/opinions?

Thanks.

Fabs

 



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fabs79


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Wowser! 43 views to my post and no opinions... I guess I'm not the only one who's not sure about it?  smile



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Wella


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Think you are right, it is a bit of a grey area, and I suspect no one was willing to advise.

My understanding from BIM35660 is that if training (for a self employed person) updates there current knowledge then it is deductible.

If, as in your scenario it gives the person new knowledge, then it becomes an intagible asset, and therefore not an expense.

The link takes you to BIM35660, which give a better description but I would on the face of it go with your treatment.

http://www.hmrc.gov.uk/manuals/bimmanual/BIM35660.htm

Edit: Just to add. It appears that it was necessary to learn a new skill in order to get the contract, and would fall into the "enduring benefit to the business" definition

HTH

Bill



-- Edited by Wella on Wednesday 23rd of November 2011 10:36:32 AM

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fabs79


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Posts: 104
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Hi Bill,

yes, that helps. That page on the HMRC site is quite clear about the training expenses and it does give me plenty of arguments to claim that the expenses should be disallowed.

It's a shame though as the client attended the training believing that it would save taxes and is now getting a wake up call. I guess this is what happens when business people do not take professional advice beforehand and leave it until it's too late...

She's a very good client (e.g. nice and polite person, not at all demanding...the dream client!) and I hate delivering bad news to good clients...  cry

Thank you for your help.

Fabs



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