Expense for accountancy training allowable?

[SorenLorensen]

I know that any training type expenses that you want to put through your Ltd must be directly related to the type of work that you are doing. However, I'm thinking of doing a basic accountancy course to aid me with the running of my company. Cost is around £300. Since this is related to the company, is it an allowable expense?

TIA.

[malvolio]

Not unless your business is accountancy. Next.

[Moscow Mule]

I think mal might be wrong in his interpretation.

Have a search for "work related training" on HMRC. I would suggest that as a director of a company (your current employment?) then a bit of accountancy knowledge wouldn't be unrelated.

If you wanted to do a course in tree surgery, I might have a different opinion. I'd be interested in seeing a bit of case law...

http://www.hmrc.gov.uk/manuals/eimanual/EIM01210.htm

[blacjac]

Not unless your business is accountancy. Next.

I disagree.

If I took a marketing course in order to help market my business, then I wouldn' hesitate to put it through the books, even though my business is not marketing......

[malvolio]

Sigh....

Let me quote SJD on that subject...

• Training

Providing the training course is wholly and totally relevant to the performance of your duties under your existing contract then you can claim this as an expense

You'll find more detail on the HMRC website. Accountancy is not the performance of your duties, unless you are an accountant, any more than driving, flying a private plane or deep sea diving would be.

[blacjac]

Sorry Mal, but I think you are wrong.

I agree with what you have quoted, however as the director of a small company, accounting is very much part of your duties, just like marketing and sales.

Your company would be at a very substantial disadvantage and would probably fail if none of these functions were performed, and any of them can be outsourced (to an accounant, or agent for example), however they do need to be performed in order to keep the company running.

If I deceide to savem my company around 1k per year by spending a few hundred one off on a training course, then this is perfectly allowable.

[SorenLorensen]

Thanks for the replies so far guys. I also don't think it's quite as clear cut a "no" as malvolio says. Reading the links from Moscow Mule (cheers btw)...

For the purpose of the exemption in Section 250 ITEPA 2003 (see EIM01210), "work- related training" is defined as any training course or other activity which is designed to impart, instil, improve or reinforce any knowledge, skills, or personal qualities which:

* are, or are likely to prove, useful to the employee when performing his/her duties or
* will qualify or better qualify the employee to undertake the employment, or to participate in charitable or voluntary activities arising through the employment.

The training must relate to the employee’s current employment or to a "related employment" (see EIM01230).

The difference here for me is the wording, "work-related" rather than "duties under your existing contract" from SJD. I'd have thought that my role as a director, accountancy (and marketing as mentioned) is directly related to my work, albeit it is not what I charge for.

Thoughts?

[Maslins]

I think it simply depends upon your motives.

I don't think many people would study accountancy for pleasure, so if you, as director of your own company doing whatever (non accountancy) want to be able to better understand your accounts, then it most likely is wholly and exclusively for the benefit of your business.

If, on the other hand, you're getting fed up of what you currently do, and are considering moving into a career in accountancy, then these courses will not be deductible expenses for your current business.

The ITEPA references are more in relation to employees, where the rules are much more strict.

[malvolio]

If you can argue that dedicated training in basic accountancy (as opposed to general reading or outsourcing) is directly related to income generation within the company, then you may have a point.

I'm not sure Hector would agree, though, since the rules of allowable training costs are all framed in terms of being related directly to income generation.

“In considering the question of purpose, you should not take an unduly narrow view of whether the content of any particular course only up-dates existing skills of the individual. But if it is clear that, for example, a completely new specialisation or qualification will be acquired as a result of the expenditure, it is unlikely that the expenditure will be wholly and exclusively for the purposes of the existing trade.”

I suggest that the OP's question fails under that distinction

The detail is here - http://www.hmrc.gov.uk/manuals/bimmanual/BIM42526.htm

[blacjac]

Hmm, that's very interesting link. It does rather seem to imply that you are correct, it would also imply that as an IT contractor any sales or marketing training would also be disallowed as this is not to do with your trade.

This however goes against the advise I have been given by my accountant (re sales and marketing), would any of the resident accountants / tax specialists care to comment?