Paying for training through limited company

[DNS1]

Hi chaps,

I'm very new to the business side of the game, but I'm going to be setting up as a limited company in the next couple of months.

I'm going to be the sole shareholder and will deposit a lump sum to fund the start up.

At some point I'm going to go back to college and do my 2392 and 2391 in the next 6 months. Is this something that the company can pay for and claim back tax on?

Cheers!

 

[Octopus]

Ask your accountant. HMRC will say no.

 

[Robert Turnbull]

I'm not 100% on this but when I was self employed training was 100% tax deductible so you essentially got the money back for the course

 

[loop3]

Stay as a sole trader until you earn a given amount. You can still claim back on training costs. Speak to your accountant. Rebate for sole trader, 300-350 for limited 900+ per year

 

[loop3]

Accountant costs., that is

 

[Octopus]

I'm not 100% on this but when I was self employed training was 100% tax deductible so you essentially got the money back for the course

Interesting spin on this. Training to improve your employability is NOT, I repeat NOT tax deductable. Training to maintain a previous qualification is, so a 17th Ed update is.

Which is total madness and is probably why most employers skimp on training.

 

[DNS1]

Cheers for the quick replies chaps, what a pain in the arse!

 

[Robert Turnbull]

Oh when I did my 17th I'm sure my accountant said it was 100% deductible.

I'm by no means an accountant I just remember having a lovely rebate that year

 

[DJ Ovengloves]

For Limited companies training is treated like any other deductible business expense; it must be ‘wholly, necessarily and exclusively’ in the performance of duties and related to income. If the training is not linked to existing income, then it cannot be treated as a deductible expense through the limited company. I would suggest that someone working as an electrician taking electrical courses would be fine, however, as Murdoch says, HMRC may have a different view.

Interesting spin on this. Training to improve your employability is NOT, I repeat NOT tax deductable. Training to maintain a previous qualification is, so a 17th Ed update is.

Which is total madness and is probably why most employers skimp on training.

 

[D Skelton]

I can confirm that you are 100% correct Murdoch

 

[odawire]

I can confirm that you are 100% correct Murdoch

Surely that's true for self employed/sole trader, but as a company you're not improving you employability, I'd class it as work based training which surely must be 100% TD. As the others I'm not an accountant so may be totally wrong but I've had a limited company for a few years now (the only sensible option in my opinion) and anything like this always gets 100% deducted.

 

[odawire]

Stay as a sole trader until you earn a given amount. You can still claim back on training costs. Speak to your accountant. Rebate for sole trader, 300-350 for limited 900+ per year

Just out of interest, why do you suggest this?

 

[D Skelton]

Surely that's true for self employed/sole trader, but as a company you're not improving you employability, I'd class it as work based training which surely must be 100% TD. As the others I'm not an accountant so may be totally wrong but I've had a limited company for a few years now (the only sensible option in my opinion) and anything like this always gets 100% deducted.

And you'd get shafted if you were ever audited!

It doesn't matter whether you're a ltd co or sole trader. The only training that is tax deductable is that which allows you or your staff to continue their trade. I am paying for two of my apprentices driving lessons at the moment and I can't claim a dime of it as tax deductible which is annoying, however the way I see it is that it will benefit me and my business in the long run.

There are some things you just gotta take the hit on and move on

 

[robbalaar86]

You are a top boss paying for driving lessons mate. Any jobs going

 

[D Skelton]

You are a top boss paying for driving lessons mate. Any jobs going

Haha, I'm not as 'top' as you think. If the driving instructor wasn't one of my best mates then I wouldn't be

 

[robbalaar86]

Haha I see mate explains the good will

 

[Atelcom]

The amount we spend on training to keep on top of the "data" world - I had to ring HMRC.

Training is deductable - Although you may have to satisfy their needs by showing what type of training it is & is it necessary to your business.

In a nutshell he said "If you was a pest control firm & spent 20% of your income budget, on car mechanics training then there is a problem" - "You have to show the training is influential to your business needs" So yes any 2381 - 2391 - 17edition, etc would all be fine if you run an electrical business.

 

[gigawatt]

Bloody accountants, don't know who to believe now. My accountant told me that training is not a deductible expense for a limited company. It might be if you are self employed, I did not check that.

I don't know who to believe now. Is only an issue if the HMRC poke their nose in, but most accountants will cover their own arse and if they think it is dodgy they won't include it in deductible expenses.

 

[Atelcom]

The ltd part doesn't come into it: That means you're vat payments need to work out during their quarter.

Regardless of the business stature, necessary training for the business needs is a deductable business expense.

Just ring HMRC tax advice & ask for peace of mind.

FOR Mobiles only 141 01355 359022

Taxes Helpline This is the “overseas” number. Withhold your number using 141 when calling from UK. Only ring this using a mobile & use 141. Otherwise use the 0870 or other chargable number found on HMRC site

 

[KAS1]

I bet the Taxman will tax your lads on the driving lessons when he finds out as they are benefits in kind, a bit more Cammeron tax for the millionaires lol

And you'd get shafted if you were ever audited!

It doesn't matter whether you're a ltd co or sole trader. The only training that is tax deductable is that which allows you or your staff to continue their trade. I am paying for two of my apprentices driving lessons at the moment and I can't claim a dime of it as tax deductible which is annoying, however the way I see it is that it will benefit me and my business in the long run.

There are some things you just gotta take the hit on and move on