Claiming course fee's back as an overhead

[peehead]

Evening all,

I'm looking to become an electrician and a via a sparky mate he mentioned that if I want to startup it's best to create a maintinance company and then do the electrician course and claim the course fee or vat back as and when.

could someone who has a better understanding of this please explain a little bit more?

 

[PC Electrics]

I simply registered as self employed, did my courses and then claimed the costs as an expense. I'm not vat registered, so didn't claim that.
HMRC don't look kindly on claimed expenses predating self employment (if they investigate, that is).

 

[Von Vardo]

As above, I registered self employed before doing my courses then claimed the fees as an expense.

 

[peehead]

Thanks for the reply. You'll have to forgve me as I'm not upto speed wth all the technicals but do a basically register as self employed, do the course and then at what point do I send my expense claim back and do I get all of it back or just vat?Many thanks

 

[Deleted member 26818]

The course fees would be listed as an expense when you fill out your Tax return.
You wouldn't get it all back, it would just reduce your tax liabilities. So you would get back about 20%.
If you registered for VAT, then you would also be able to claim back the VAT, although you would then have to charge VAT whenever you did any work.

 

[Octopus]

If you are a sole trader or a Ltd company and in the eyes of the HMRC, training courses which improve your standing/education/skills are not allowable tax deductable expenses.

Having refresher courses to maintain a qualification is allowable.

 

[SW1970]

If you are a sole trader or a Ltd company and in the eyes of the HMRC, training courses which improve your standing/education/skills are not allowable tax deductable expenses.

Having refresher courses to maintain a qualification is allowable.

My accountant says the same, however he also says that if the "improving" qualification is a barrier to entry in the particular industry, then it's worth trying on with HMRC but save the 20% tax in the bank just in case it's bounced later on. If you're starting up, there is an argument that 2382, 2391 etc are barriers to entry (with respect to competent persons scheme registration). A contrast is Prince2 in project management; you do not have to have Prince2 to be a project manager and to be able to get work. Of course it's debatable which electrotech quals are required and not required. Perhaps the JIB quals list comes into play as well. I'm trying it on to see what happens.

 

[1shortcircuit]

training courses which improve your standing/education/skills are not allowable tax deductable expenses.

Exactly what my accountant told me, You can imagine how pleased I was to hear those words lol

 

[Deleted member 26818]

BIM42526 - Specific deductions: administration: own training courses
Provided it is incurred wholly and exclusively for the purposes of the trade carried on by the individual at the time the training is undertaken, expenditure on training courses attended by the proprietor of a business (either as a sole trader, or in partnership with others) with the purpose of up-dating their skills and professional expertise is normally revenue expenditure, which is deductible from profits of the business.
The text of an article on this subject published in TB1G in November 1991 is reproduced at BIM35660.
Business purpose test
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. For general discussion of business purpose see BIM37050 onwards.
Capital test
Expenditure on new skills etc may also be capital if what is acquired can be viewed as an identifiable asset of sufficient substance and endurance. For more on the circumstances in which expenditure on intangible assets may be capital see BIM35500 onwards.