Expensing training courses as a contractor

[NibblyPig]

Looked at the HMRC rules, done a search, lots of people arguing about it being permitted or not.

Just wondering if there's anything a bit more concrete that says if you do a training course, for example you are a Java contractor and you want to improve your chances of landing a contract by doing an expensive certification course in android app development (which is also java), if that counts as improving existing skills (expanding the ways you can use your skills) or a new line of business (going into mobile app development).

Anyone know? I want to expand my skills to cover other areas of software development that may potentially be more lucrative.

Rather than looking at the subjectives, just wondering if there's any yes/no pre-existing situations or people that have done this.

[SueEllen]

There is no straight yes and no answer because it's not a straight forward subject.

This is mostly due to the size of our companies. Unless your company is a medium size enterprise or bigger there are lots of things you aren't allowed to do.

In general if the course is not a full degree, it's related to IT and to skills you have before then you can expense the course however your company should pay from it straight from the company bank account in the company name. So as android development is directly linked to Java development then yes you can expense it as it's improvement of existing skills.

If you decided to do a short course in journalism as your company specialises in development then you wouldn't be able to expense it as it's not related to IT. However if the client you had a contract with had a requirement for you to have the journalism skills then you would be able to expense the short course.

If you decided to do a short course in accountancy as the main business function of your company is not accountancy and due to the small size of your company, then you can't expense the course even though the accountancy skills would be of use to your business. However again, if you had a contract with a client who required you to have skills in accountancy then you would be able to expense the short course.

In regards to degree courses lots of them are modules now so while you can't expense the full degree if one of the modules fulfilled the criteria of giving you the skills you need you can expense it. So a full degree in cybersecurity would be a no-no but one or more modules out of the degree could be expensed if you could show they were linked to a contract or improving existing skills.

There are posters on this board who have done OU courses and degrees in various subjects paid out of their own pockets, while there are others who have done courses in languages who have got their company to pay simply as it was needed to help fulfil a contract.

[SpontaneousOrder]

I'm a software developer. And in any non-trivial project thee will be many languages and tools in play in one form or another.

I wouldn't worry about being so precise about it as to link android to work because it's java. It's software.

My current engagement has be doing Java, some Ruby & Python, shell scripting, AWS dev/administering, docker, 'big-data', mysql, hbase, a little bit of html & javascript, the odd unfortunate dip into php.

Every single one of those I touch enough in this project alone for it to be beneficial to me and my client if I understand those technologies better.

I wouldn't necessarily claim a course on games programming though - because although it's software, it's a completely different domain than the one I have expertise in, and it's not something I'm likely to make any kind of commercial success from.

[northernladuk]

If you want to do it to open a new line of work then IMO that's capital and can't be claimed. If it's to get a cert in what you already do or very closely related you can claim. I'd say the fact you said it opens new avenues this one is capital.

[SueEllen]

If you want to do it to open a new line of work then IMO that's capital and can't be claimed. If it's to get a cert in what you already do or very closely related you can claim. I'd say the fact you said it opens new avenues this one is capital.

HMRC doesn't see it like that. If it's all in the same domain - which programming languages are - then it's allowable.

If you work on systems like lots of people do on here then saying a course in programming language x isn't allowed but y is because you have skills in y, when you have to work on x and y in your contract is stupid. The fact that you 3 months experience in x plus some training which now allows you to work exclusively in x in more domains than initially is just luck.

However like in the examples I gave above journalism, accountancy and foreign languages are in completely different domains so explaining to your accountant and then an inspector why the latter expense is allowable will get a "No" unless you can show it's linked to a contract you have when you started the courses.

[NibblyPig]

I'd say the fact you said it opens new avenues this one is capital.

I'd say it increases my chances of securing a gig doing what I do currently, which is software development/consultancy for other companies.

I think it is a bit subjectivy though and I see both sides and you could make a case for either, which is why instead of hashing out what we all think I thought it'd be great if I could find some way to get a definitive answer... I am guessing you can't just ask HMRC about this kinda thing? Or know of people that do this kind of thing all the time and it's completely fine?

[northernladuk]

If you think it's viable then just claim it IMO. If it's this close to call HMRC will have a struggle arguing it.

[SueEllen]

I'd say it increases my chances of securing a gig doing what I do currently, which is software development/consultancy for other companies.

I think it is a bit subjectivy though and I see both sides and you could make a case for either, which is why instead of hashing out what we all think I thought it'd be great if I could find some way to get a definitive answer... I am guessing you can't just ask HMRC about this kinda thing? Or know of people that do this kind of thing all the time and it's completely fine?

You can't get a definitive answer as like with IR35 a good part of it is subjective.

You have to remember that NLUK doesn't take risks at all so personally I would have a word with your accountant. If your accountant says "No" then it's "No".

Your accountant is likely to say "Yes" if you state clearly:
1. What the course is in
2. Why you are doing the course e.g. it's to formalise, extend or update existing skills
3. How it relates to the work you do already
4. Explain how long the course is

HMRC, from reading one of the accountant's views on another thread who has had client's investigated, is less strict than your accountant would be in terms of IT courses due to not understanding the domain. So if the course is in IT and not a degree it would immediately be allowed regardless if the course was on infrastructure, software development or networking. There as if like in my above examples you had to do journalism they would immediately be suspicious until you pulled out paperwork to show it was needed to fulfil a contract.