Husband & Wife , (both only shareholders) have a successful trading company, with over 40 employees. H is a director, W is company secretary.
W now wants to train in an unrelated filed and this will cost around £20k with the hope that once trained she will be able to generate income in the future. H wants the company to pay for this training and I have been asked to advice and I have already told him of my reservations of the whole idea.
My initial research says that as this would be a non-work related training, and a Benefit is reportable via the P11d with Class 1A payable. The expenditure be tax deductible in the company.
Could we present a case, that as his relates to future trading income and hence is be classified as Work related trading and hence not taxable as a benefit? And following on from this ( if not a benefit), could the expenditure still be tax deductible in the company accounts, or an add back and carried forward to be deducted against the future said trading income?
Thank you
Replies (9)
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If it is non-work related it is a P11d item.
Without knowing the existing trade and the the training its hard to give any more advice.
Dodgy ground
Firstly can you say what the current trade and the proposed training relate to. You have said that the new training is unrelated, but there may be some way of linking the two. I assume you have already covered this, but it doesn't hurt to check. Even with the mention in the opening post, mrme89 was quite right to raise the question as this is a point that needs confirming.
If they are truly unrelated, then you are on dodgy ground at best trying to claim it. The fact is that, at the time the training is taking place, there is no trade that it relates to. A future intention to go into that trade is not enough. The company is not currently geared up for the new trade. You only have a "hope" that you could get customers for a new trade. There is no future trading income to relate it to, because there is currently no certainty the company will go into that trade.
To have any hope of making a claim, there would have to be some movement to commencing the trade BEFORE training takes place. Anything else will be dead in the water.
For future reference, abusing someone who has given you a brief answer is not a good way to get further advice. Based on the facts as they stand mrme89 is quite correct. The advice was succinct, but it is only your wish to find a way to make it deductible that warrants anything longer.
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Thank you stepurhan. It's the shirty attitude why I didn't respond any further than "you have your answer then".
As always, a comprehensive post by your good self.