I'm level 2 ICB (AICB) and have had my own bookkeeping / payroll / tax return practice for about 9 months, with Practice Licence.
I'm about to embark on Level 3 and Level 4 AAT more as an improvement to my knowledge rather than for the qualification, though I might take the exams just for the heck of it.
I have 20 years industry experience from commercial banking / accounts departments etc and stick mainly to my core business of bookkeeping, and I am a Finance Director a couple of days per week for a company, though that's pay rolled rather than through my business.
I don't necessarily want to start a discussion about the merits of AAT or ICB as that's been well covered elsewhere (thanks Shaun!!) but my question is can I claim the £800 charge by Kaplan for the Distance Learning (level 3) + £80 Student fee for AAT + possibly exam fees at £36 each as a tax deductible expense?
Is it 'wholly and exclusively' for the purpose of my trade - yes. But will it train me to a standard where I can offer a different set of products or trade - technically and possibly yes, though I'm not doing it for that....but it would fail the expense test on training on that point.
See my dilemma? Your thoughts appreciated and will be quoted back at the HMRC inspector when he comes knocking.........ha ha only joking it's better to quote the guy down the pub.
think that for this scenario you need to have a qualification where you can put this under CPD to make it a necessary investment rather than a nice to have as to me it seems as though whilst it may be useful for the day job it is not a necessity to have the AAT qualification to perform the role that you already have so it would fail the HMRC tests.
A different approach that would save you more than the tax saving on putting AAT through the company would be to do the ACCA CAT qualification instead as you don't need to have a training provider for that one and it's every bit as good at AAT (if not perhaps quite so well known amongst employers).
The issue though may be what you are allowed to do if you sign up to either of those as doesn't becoming a student member place more restrictions on what you are allowed to do under your other supervisory bodies (I know that with the ACCA their more Draconian rules take preference).
Its all wrong isn't it that we seem to be punished for trying to expand our knowledge base. Just getting past the barriers that the interaction of the rules that the various supervisory bodies put in our way should be worth a qualification in itself!
All the best,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I read an interesting explanation about this, which basically argued that training to acquire new skills / knowledge effectively benefits your business for years to come.
Therefore it's should be classed as capital expenditure and there are no capital allowances for this type of asset.
The student fee is tax deductible.
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Tony
Responses are intended as outline only. Formal advice should be sort from your Institutes Technical Department or a suitably qualified Accountant.
Hope my reading of the standards is right (feel free to correct me if you think it's not) but my understanding is that per IAS38 Intangible Assets (or FRS10 under UKGAAP), training as with relocation and advertising expenses must never be capitalised.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Which also has a link to the relevant BIM section.
Pretty sure this would class as an intagible asset
Edit: Just spotted your reference Shaun, not got into it but maybe it refers to employee training which is different from a company officer (or close relative thereof, or soletraders), and is allowable as an expense in all cases CPD, or new knowledge. In the case of the soletrader it may be acceptable as some form of interlectual property asset? Just food for thought (crisp anyone?)
HTH
Bill
-- Edited by Wella on Friday 25th of November 2011 06:35:54 PM
Took my line from IAS38 which startes that the following items must be expensed as incurred (see IAS 38 paragraphs 38 and 69):
internally generated goodwill start-up, pre-opening, and pre-operating costs training cost advertising and promotional cost, including mail order catalogues relocation costs
If I'm wrong tell me now as P2's creeping closer again and there's invariably a trick question buried in there (so you hardly notice it in passing) related to treatment of these sort of expenses (which even for key company officers I'm sure that this is).
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
just had a read of the blog and I don't think that they're right as they're comparing treatment of a vehicle (capital expenditure covered by IAS16 / FRS15) with training (an intangible covered by IAS38 / FRS10).
Nothing against the person writing the blog as this is one of those minefield area's where it's easy to come up with the wrong interpretation (which I may well have done!). However, the blog is written from the perspective of applying logic and being able to argue such logic with HMRC (often a fools errand!) rather than using HMRC guidance as Bill does in his appraisal of the scenario.
I think that the viewpoint of the blog is that it applies logic to the scenario but that logic is not neccessarily in line with how the regulations should be interpreted.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I take your point - it seems to me the problem is there's a conflict between BIM35660 and IAS38. I'm assuming that training fails the identifiable test under IAS38 because it isn't capable of being separated and sold etc.
edit: Apologies Ken for taking your thread off-topic.
-- Edited by ADAS on Friday 25th of November 2011 07:27:19 PM
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Tony
Responses are intended as outline only. Formal advice should be sort from your Institutes Technical Department or a suitably qualified Accountant.
No need to apologise Tony I find tax fascinating and this discussion proves that just like any law based discipline there is always more than one explanation.
Does not help us at the coal face perhaps to give a definitive answer but interesting none the less.
Carry on, and everyone else please don't hesitate to add your thoughts.
