tax relief on CPD course fees

Are costs of course fees allowable for new skill

Didn't find your answer?

A self employed Dentist, who is an associate in a general practice, wishes to embark on a course where they will gain a new skill and qualification whereby they can subsequently carry out dental implant work. They are not qualified to carry out this work at present.

It is correct that the cost of gainng this qualification is treated as capital, and so is not tax deductible in then profit and loss account, and is also not eligible for a capital allowances claim as an intangile asset?

 

 

Replies (12)

Please login or register to join the discussion.

Avatar
By I'msorryIhaven'taclue
10th Sep 2021 12:04

New expertise, new skill, new knowledge.

Surely the new qualification seals it that the training is enduring.

Thanks (0)
avatar
By David Ex
10th Sep 2021 12:08

northernman wrote:

…also not eligible for a capital allowances claim as an intangile asset?

I think last time this was discussed, the point was made that the business doesn’t acquire anything; the individual does.

Thanks (0)
Replying to David Ex:
avatar
By The Dullard
10th Sep 2021 14:17

Exactly this. I wouldn't say that this was acquiring a new skill either; it's broadening the existing skill. I wouldn't have thought that just anybody could even learn to do dental implants, and that it is necessary to first be a dentist.

To my mind you're not providing clients with a proper service if you just toe HMRC's line on every issue. This isn't black and white, so the proper course is to come up with a tenable basis for (i) claiming the expense in the first place, (ii) taking issue with HMRC if they dispute it, and (iii), if the amount is substantial, taking the matter to tribunal.

Thanks (0)
Replying to The Dullard:
avatar
By David Ex
10th Sep 2021 14:44

The Dullard wrote:

Exactly this.

Probably you who said it!

That question also concerned a dentist, I’m pretty sure so worth trying to find.

Thanks (0)
Replying to David Ex:
avatar
By northernman
10th Sep 2021 14:58

HMRC’s views were originally published in Tax Bulletin 1G in November 1991:

There is some uncertainty whether the cost of proprietors of a business attending a training course, directly related to the business activity, is deductible in arriving at the [trade] profits chargeable to tax.

Where attendance at a course is intended to give business proprietors new expertise, knowledge or skills, which they lack, it brings into existence an advantage that 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 [S33 Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005)].

On the other hand, where attendance is merely to update expertise etc. which proprietors already possess, the expenditure is normally regarded as revenue expenditure and will be deductible if it satisfies the “wholly and exclusively for the purposes of the trade” test in [S34(1)(a) ITTOIA 2005]’ – see BIM42105.

Their guidance to Tax Inspectors is:

You should therefore allow proprietors a deduction for expenditure that merely updates existing expertise or knowledge but disallow any expenditure that provides new expertise or knowledge (particularly where it brings into existence a recognised qualification like a Master of Business Administration).

Thanks (0)
Replying to northernman:
avatar
By northernman
10th Sep 2021 15:01

so is the dentist updating an existing skill or acquiring a new one?
the case Dass v Special commissioner may also be relevant

Thanks (0)
Replying to David Ex:
Avatar
By I'msorryIhaven'taclue
10th Sep 2021 15:17
Thanks (0)
Replying to The Dullard:
Avatar
By I'msorryIhaven'taclue
11th Sep 2021 12:24

The Dullard wrote:

To my mind you're not providing clients with a proper service if you just toe HMRC's line on every issue. This isn't black and white, so the proper course is to come up with a tenable basis for (i) claiming the expense in the first place, (ii) taking issue with HMRC if they dispute it, and (iii), if the amount is substantial, taking the matter to tribunal.

Well you've just made a good argument for "General Practitioners" to refer clients on for specialist advice. The way the medical and legal professions do.

IMHO much of the problem originates with budget-conscious clients enrolling with the cheapest looking accountant they can find, then raising complex issues. Rather like taking your Porsche to the local garage and expecting specialist knowledge and expertise.

Thanks (0)
Replying to David Ex:
Avatar
By I'msorryIhaven'taclue
10th Sep 2021 16:14

Nice bridging work, David ;-)

Thanks (0)
Replying to I'msorryIhaven'taclue:
avatar
By David Ex
10th Sep 2021 16:26

I'msorryIhaven'taclue wrote:

Nice bridging work, David ;-)

Ah, so that was the dental specialism!!

I should have hit refresh before posting ….

Thanks (0)