TAX FEATURE: Tax deductions for training courses ' Part 1. By Nichola Ross Martin

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The self-employed, particularly accountants regularly attend work related training courses. In this article, Inspired by a query posted in Any Answers, Nichola Ross Martin looks at training courses in terms of tax treatment as revenue/capital from the perspective of the self-employed and employer claiming a deduction against profits. In a second article to be published next week, she will look at the employees and the restrictions that they have in claiming deductions for training expenses against their income from employment.

Deductions for the self-employed

HMRC views about training course for the self-employed is set out in Tax Bulletin 1G, which became Revenue Interpretation (RI) 1. It says: "Where attendance at a course is intended to give business proprietors new expertis...

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03rd Jun 2014 16:23

Part 2 ?? And Update

Anyone have a link to Part 2

And is this excellent guide in need of an update in the light of recent cases?

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By cisono
29th Jan 2015 12:06

I am not an accountant, so I would really appreciate if someone could please clarify what this means in terms of self-assessment for a sole trader?

You said:

"HMRC views about training course for the self-employed is set out in Tax Bulletin 1G, which became Revenue Interpretation (RI) 1. It says: "Where attendance at a course is intended to give business proprietors new expertise, knowledge or skills which they lack, it brings into existence an intangible asset which is of enduring benefit to the business. We take the view that the expenditure is therefore of a capital nature, and deduction is prohibited by ICTA88/S74 (f) (now s.33 ITTOIA 2005)."

OK so training costs relating to new expertise/knowledge or skills is not a deductable expense. The expenditure is of a CAPITAL NATURE - does it mean it could be classed a capital allowance (like a van for instance)?

Please note that all the new qualifications the owner/sole-trader is acquiring fall within career development and the field of practice of the sole-trader is by definiton "holistic".

Thank you.

 

 

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