Mmm. I posted the same question a while back, and the answer I got seemed to imply that I could put them through the business but they weren't tax deductable.
So, I was planning on booking them in, but then adding them back for tax.
-- Edited by Jo Gordon on Wednesday 1st of February 2012 01:08:07 PM
Bill - your comment makes perfect sense, but now ClawzCTR's comment has confused me again...
I've set up a company with me as director, so not sure if that makes a difference.
Say I did some training (1), then set up my company, then did some more training (2), then started trading, then did some more training (3). I fully plan to book all the costs through the company as they all relate to me getting my practicing certificate, and without that I don't have a business. It also means I can create a balance on my directors loan account and at some point take it back tax free...
Are we now saying the training costs (1) are not tax deductable? Are we saying the training costs (3) are because they are to update/widen my skills? What about training costs (2) in the middle post incorporation but pre trading?
-- Edited by Jo Gordon on Wednesday 1st of February 2012 05:59:08 PM
To the best of my knowledge I think I am correct in saying that training courses undertaken to be able to get to a point of being able to practice cannot be claimed through the business, as you can't practice without the training?
What about the travel and hotel costs incurred as my client had to travel and stay away from home as the course was not held nearby to her home?
Can these be claimed or do they fall into the same category as the training itself?
Thank you
Hi, as its not wholly and exclusively for the business at the time I believe that it is not allowable. The costs would be incurred for the training and not the business.
Mmm. I posted the same question a while back, and the answer I got seemed to imply that I could put them through the business but they weren't tax deductable.
So, I was planning on booking them in, but then adding them back for tax.
-- Edited by Jo Gordon on Wednesday 1st of February 2012 01:08:07 PM
Hi Jo
What you are proposing to do seems OK to me.
It goes back to a similar situation on another post, which is about seperating the financial statements from the tax computation.
The first is used as the starting point for the second but are two different animals.
It's easy to confuse the information on HMRC website, with what is entered in the books. Although it follows standard accounting practice, there are some differences. It is where the tax treatment is different that you need to make adjustments, usually independantly of the business accounts.
Thats kind of the situation im in too. Im practicing, so i have relevant courses under belt, but im expanding my knowledge by doing the AAT3 and to increase my 'employability'. According to that Manual BIM42526, and i quote:
"Provided it is incurred wholly and exclusively for the purposes of the trade carried on by the individual at the time the training is undertaken, expenditure on training courses attended by the proprietor of a business (either as a sole trader, or in partnership with others) with the purpose of up-dating their skills and professional expertise is normally revenue expenditure, which is deductible from profits of the business."
If you are currently running a business as a bookkeeper or accountant and a training course is required in order to improve your commercial standing then it would be an allowable expense of your business.
If you aspire to trade as a bookkeeper or accountant and are not yet trading then the expense is not allowable.
Lets take an example...
Someone wants to become a bookkeeper so starts studying ICB. They fund the course / exams etc. themselves to achieve AICB status. This expenditure is non allowable.
Once they have AICB status they set up a business.
In order to expand the services that their supervisory body allows them to offer they must take additional exams.
This would be an allowable expense of the business as they are already trading as a bookkeeper and the expenditure was incurred wholly and necessarily for the purpose of the business (note the absence of exclusively there).
Similar story with CPD (continued professional development) in that it's a necessity to take CPD in orde4r to continue to trade, therefore it's an allowable expense of the business.
So, both Bill and Garry are actually correct.
Hope that makes sense,
Kind regards,
Shaun.
__________________
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 had made my assumption on the basis of a soletrader. As a director i think this may change things
Haven't got time to check it out at the moment but I have a nagging feeling I have seen something somewhere on HMRC site, specifically about an officer of an incorporated business receiving training.
