Discuss Claim course costs against tax in the Business Related area at ElectriciansForums.net
Business purpose test
In considering the question of purpose, you should not take an unduly narrow view of whether the content of any particular course only up-dates existing skills of the individual. But if it is clear that, for example, a completely new specialisation or qualification will be acquired as a result of the expenditure, it is unlikely that the expenditure will be wholly and exclusively for the purposes of the existing trade. For general discussion of business purpose see BIM37050 onwards.
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 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).
"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 ICTA88/S74 (a) (now s.34 ITTOIA 2005)."
Revenue v capital
In short it is initially a question of looking at the facts, and taking exactly the same approach in considering whether the cost is revenue or capital as one would for any other type of cost. Those who have done full professional exams in the past will have covered a broad range of topics in those exams, and any course will be regarding as updating expertise, knowledge or skills that have already been created.
Reading between the lines I see it as; if you are training yourself in your current trade or something associated in your trade then tax deductible. If you are just signing up for any old balls in an attempt to spend some of your profit then not TD....
My understanding is that qualifications required for you to be able to trade in a particular profession, would not be eligible,
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