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Training Costs

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    Training Costs

    So one contract ends and the next begins a week later so I have an opportunity to do some work related training. So I booked myself onto a TOGAF course. When I submitted my business expenses to my accountant they included the training course. So the accountant emailed to check whether or not it was business related which I could confirm that it was. She then asked whether it was a new skill or improving an existing skill as HMRC has apparently disallowed an expense claim for a Masters degree for this reason. I could confirm that it was a new skill that could help me land more contract assignments. Finally, the response was that as it was a skill that I could conceivably use in a future job as a permanent employee rather than as a contractor then it was not an allowable business expense.

    Long story but short question - anyone else put IT training courses down as business expenses?

    #2
    I believe it needs to be related to what you currently do that earns you income currently, as opposed to learning a new skill which could broaden your horizons as far as generating future income is concerned.

    This might be useful:

    Training expenses - what contractors can claim

    Comment


      #3
      Just a thought...is your accountant saying you can't put the course through your Ltd at all? As that link I provided suggests that even if it is not allowable, you can still put it through the Ltd but it won't attract any tax relief for CT, which is better than not being able to claim it all!

      Comment


        #4
        Originally posted by captainham View Post
        Just a thought...is your accountant saying you can't put the course through your Ltd at all? As that link I provided suggests that even if it is not allowable, you can still put it through the Ltd but it won't attract any tax relief for CT, which is better than not being able to claim it all!
        The advice I am getting is to treat the course expense as a director's loan and to not put it through the company books but fund the course out of my personal funds.

        Thanks for the advice and that link will back up my case that it should be a legitimate business expense as it was a course to enhance my current skillset and help to land more contract work which is what the game is all about surely.

        Comment


          #5
          It must indeed be related to your current work. Pre-training, languages, OU, MBA courses etc all fall outside (arguably of course). I have been quoted on here saying that this is one even my risk level would be happy to put through and argue later but have since been told otherwise by my accountant so happy to take a stance as advised by a professional.

          Have a look at this link

          http://forums.contractoruk.com/accou...ing-costs.html

          Also other links where this has been discussed.

          training site:forums.contractoruk.com/accounting-legal/ - Google Search
          'CUK forum personality of 2011 - Winner - Yes really!!!!

          Comment


            #6
            This is one where I'd take the chance. If you get a subsequent contract that utilises the skills you've trained in, it would be very perverse for HMRC to insist it was not business related.

            Comment


              #7
              Originally posted by mudskipper View Post
              This is one where I'd take the chance. If you get a subsequent contract that utilises the skills you've trained in, it would be very perverse for HMRC to insist it was not business related.
              That isn't the point though. They can prove it wasn't taken for the work that you are doing. It is very clear. Nothing to do with perverse. Being pedantic of course, I would have claimed it had my accountant spotted it.
              'CUK forum personality of 2011 - Winner - Yes really!!!!

              Comment


                #8
                Originally posted by mudskipper View Post
                This is one where I'd take the chance. If you get a subsequent contract that utilises the skills you've trained in, it would be very perverse for HMRC to insist it was not business related.
                If the course fitted in with what was on the rest of a particular version of your CV you wouldn't have to prove anything and it would be easily claimable.

                It's an IT course and regardless of whether you permanent or not, the course skills can clearly be utilised by someone in IT with the relevant experience.

                I think the problem with geoffreywhereveryoumaybe is that after trying to get a full degree through the books in one go his accountant thinks he is taking the p*ss with any course he wants to do.

                Probably a good idea for geoffreywhereveryoumaybe to take time off from spending money on paid courses and utilising things that are free while gaining experience.
                "You’re just a bad memory who doesn’t know when to go away" JR

                Comment


                  #9
                  Just to reiterate what I said earlier, something like a TOGAF (as opposed to a degree, for example) is most likely still claimable as a business expense, it's just not tax-deductible. This is a whole heap better than the OP having to pay for it personally.

                  I'm basing this on the link I posted earlier though, because as we all know IANAA

                  Comment


                    #10
                    Really it's not up to your accountant to say its allowable or not.

                    The dividing line tends to be blurred between new skills and developing existing skills, and the view I woud always take is to explain the two limbs to the client and let them draw their own conclusions unless they specifically say "you decide for me".

                    It is an area where I think you can safely err in your favour, IME generally HMRC won't query unless its a clear abuse.

                    YMMV

                    Comment

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