training as company expense ?

[krssubbu]

Hi,

I have my own limited company and new to contracting. I am in the IT sector and would like to get some training in the technologies I am working at the moment. The training seems to lot cheaper in India than in UK. So can I do this course in India and put the flight charges as expense though my limited company ? (works out cheaper including flight and training than in UK!!!)

Can someone please let me know if the this is accepted as my accountant says "its a grey area and its under your own risk if you want to put training as expense " - I know many of my colleagues who have different accounts have had no problems with training and associated expenses incurred with it go through company expense

In case if I take risk and put it as company expense, in case if hmrc inspects my account what will be consequence ? will I just have to pay the expense and training charge, that I put through the company, out of my pocket or will it have any other effect ?

Thanks

[Clare@InTouch]

As long as the training is enhancing skills you already have, then I'd say it's fine to claim for.

The travel can be a grey area, especially if you happen to have family there who you visit/stay with. If not, and you don't add on any extra time for holiday, then again I'd say it's fine to claim.

[stek]

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[Craig at Nixon Williams]

Agree with Clare's view on this. The cost of training should be ok - it is the travel if there is any sort of private benefit such as a holiday tagged on the end or if you are accompanied by (or are visiting) family that make the expense a grey area.

Craig

[krssubbu]

Agree with Clare's view on this. The cost of training should be ok - it is the travel if there is any sort of private benefit such as a holiday tagged on the end or if you are accompanied by (or are visiting) family that make the expense a grey area.

Craig

I mean I have family back home and when I going home, I will be staying with them which I am not going to claim for. so say if I go for 2 weeks and the course is 3 days and if I don't claim for anything other than just flight charges will this be fine ?

and the worst case if hmrc inspects, will I just have to pay this or will they start investigating into my account ?

[Craig at Nixon Williams]

I mean I have family back home and when I going home, I will be staying with them which I am not going to claim for. so say if I go for 2 weeks and the course is 3 days and if I don't claim for anything other than just flight charges will this be fine ?

and the worst case if hmrc inspects, will I just have to pay this or will they start investigating into my account ?

If this is the case then I would suggest that you do not claim for the cost of the flight as the majority of the trip is to visit family. You should have no problems if you just pay for the cost of the course and fund the travel personally.

Craig

[Clare@InTouch]

If this is the case then I would suggest that you do not claim for the cost of the flight as the majority of the trip is to visit family. You should have no problems if you just pay for the cost of the course and fund the travel personally.

Craig

Agreed. With time scales like that the trip is personal, with some business added on. The flight is therefore personal. You could claim any additional costs incurred because of the training element, like travel to the venue from where you're staying.

If HMRC investigate and they think you purposely claimed for something you shouldn't have then the penalties can be up to 100% of the tax due, plus interest. It could of course also make them curious about what else you've done that you shouldn't have......

[ASB]

The issue of flights has been addressed.

Ultimately it comes down to a matter of judgement between the OP and their accountants. If particularly risk averse don't put it through. Otherwise put it through. There will be no problem with this - until there is a compliance review of some description which may or may not cause a problem. The worst that is likely to happen is a charge. The worst that could happen would be penalties etc as well.

The tax saving is of course broadly speaking 20% of the flight cost. Perhaps a couple of hundred quid at the most.

Many years ago I had to make a trip to Jo'burg for a couple of weeks support work. So I took my wife and child, extended the trip by a week and went to see friends in Durban.

I charged it to the company, but declared the flights that were not mine as BIK.

In a subsequent investigation HMIT picked up on it. I gave the details and suggested if he checked he would see I had taken some as BIK. In my case he was fine (but this was about 15 years ago).

[MPwannadecentincome]

This is where permie employees get away with it...

Company: "we can save money sending you on training abroad, would you like to go?"

Permie: "yes please and can I tag an extra day on the end to tour the place?"

Company: "sure thing we'll still pay for the flights".

[ASB]

This is where permie employees get away with it...

Company: "we can save money sending you on training abroad, would you like to go?"

Permie: "yes please and can I tag an extra day on the end to tour the place?"

Company: "sure thing we'll still pay for the flights".

Oh yes, I'm receiving some training next week. In Brum. Don't think I'll be extending my stay.