Contents
Borrowed clothes?
You want it when?
The daily grind
Knock knock
Computers@home
Stick to the facts
It's personal
Expense claims
Cash down
Plant buying
Hobson's choice
A helping hand
Education, education
Up with the Joneses
Bills bills bills
Done to a crisp
Tax association
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Tony Blair (remember him...?) was very keen on education when he was running for office. The Inland Revenue can be less sympathetic when taxpayers try to claim a tax deduction for the costs of training. There have been quite a few tax cases about this, and the taxman usually wins - so, to avoid disappointment, it's worth knowing what the rules are. An employer can pay for employees to be trained with no bad tax consequences, as long as it's relevant to the job - or retraining a redundant employee for a new job. It's a valid expense for the employer, and not taxable for the worker. You can't dress up a "jolly" as a training course - teaching your sales executives to drive racing cars will probably be taxable as a benefit in kind. The problem arises when someone decides to pay for their own training. It's hard to get a deduction under the rules for employees: you have to show that the expense was "necessarily" incurred "in the performance of your duties". Usually the taxman will argue that you aren't performing the duties - you are preparing to do so - and if it was necessary, your employer would pay. So it would be more tax efficient to agree that the employer should pay, maybe taking the cost into account the next time salaries are discussed. A self-employed person is supposed not to claim an expense for training if it involves the acquisition of new skills which did not exist before, and creates a lasting benefit for the trade. This is a Catch-22 problem - why else would you go on a course? If it's just to update your existing skills that should be all right, but if it's something altogether new, they may object. If you would like to check up on the tax treatment of your training costs, we'll be happy to answer your questions. l  |