Expenses incurred beofre company formation

[Yatesy]

Recently and whilst still in the land of being a permy, I spent money on some training materials and exams to reinforce my CV prior to making the plunge into contracting. Now that I'm up and running is it too late to count this as a business expense? It was genuinely and solely incurred to facilitate the rise into contractorhood, and was unrelated to my previous role.

TIA!

[Sockpuppet]

I did a thead on this a while back, search for threads started by me and you'll find it.

My accountants advice was I could could my PRINCE2 training as a business expense but I should put it through in my second VAT return so its looks less usspect.

[Yatesy]

Thanks SP, I'll have a chat to my accountant about it. It's not the end of the world if I can't claim it, but I paid it out of my own pocket so it would be nice to get the relief on it!

[DaveB]

I was under the impresion, from a number of discussions here a while back, that training was not claimable as a business expense or against VAT. I'm not an accountant though. Can anyone give us a definitive answer?

[Yatesy]

From my understaning (and that ain't definitive by any means) it depends on IR35 status.

[Pondlife]

I was under the impresion, from a number of discussions here a while back, that training was not claimable as a business expense or against VAT. I'm not an accountant though. Can anyone give us a definitive answer?

There is a discussion on this matter over on S99

http://www.shout99.com/contractors/s...le.pl?id=40165

You have to be able to prove that the training was wholly required for your current business and not purely to gain future business.

Although I don't agree with the advice.

[malvolio]

And as I've said before, you can claim as much as you like on anything you like. However, if it's not business related, you treat it as personal income and pay tax accordingly.


Training costs inside IR35 are one of the real irritations. Basically, the 5% is meant to cover it (yeah, right), you can't offset it against your deemed salary.

[DaveB]

There is a discussion on this matter over on S99

http://www.shout99.com/contractors/s...le.pl?id=40165

You have to be able to prove that the training was wholly required for your current business and not purely to gain future business.

Although I don't agree with the advice.

Yes, I see what you mean. Is it the company benefitting from it or you personally? Is it something you need in order to perform your current duties as an employee or not? If Hector decides it's personal benefit or not related to your current duties then it goes on your P11D and get taxed.

I'm not sure I agree with the advice, to try it on and see what happens, either. Too much chance of it raising eyebrows and leading to a fuller investigation I would have thought.

[Yatesy]

Malvolio, I don't have a problem with the concept of what can be claimed or can't, if you spend money solely for your business and can support it then the expense is claimable, without BIK thats fine. My questions was whether an expense claimed prior to company formation is submittable or is it just tough luck then?

[Pondlife]

Malvolio, I don't have a problem with the concept of what can be claimed or can't, if you spend money solely for your business and can support it then the expense is claimable, without BIK thats fine. My questions was whether an expense claimed prior to company formation is submittable or is it just tough luck then?

If it a legit bus expense incurred prior to formation then it is expensable (sp?) There is a time limit but it's pretty big (2 years IIRC?)

IANAA etc.