Can I deduct courses?

[Isedo]

Hi folks, I bought an online course and went to an one to one coaching regarding marketing. Can I deduct these expenses on my Ltd? I'm the owner.

The problem is that the person from the one to one course which i paid quite a lot, is not able to give me an invoice.

How to deal with that? Any advice?

I'm reading online:
"
Bank statements instead of receipts
If you are not claiming back VAT your bank statement can serve as proof of purchase as long as you paid using your business card. Note, you cannot use this method to claim back VAT if the purchase was over £25."

So from what I understand, since I paid this guy through the business bank account and i'm not claiming back VAT, i'm ok with the law. Is that correct?


Thanks

 

[Mr D]

Ask them why they cannot issue an invoice to you?

Is the course wholly and exclusively for the business?

 

[Isedo]

Ask them why they cannot issue an invoice to you?

Is the course wholly and exclusively for the business?

Yes the course is business related. Nothing personal. I mean, yes, I'm passionate about marketing and sales but it's 100% for business purpose.

Yeah no idea really, I think this guy does not have a proper tax position...he is kinda avoiding the answer...I should check this before...I know. My bad.

 

[Scalloway]

Do you have other evidence of payment? eg emails, screenshots?

If the course is to extend your exisiting knowledge then it is deductible, for example you want to improve your marketing skills. If you are planning to open a new marketing business then it is not deductible.

 

[KAC]

@Scalloway Does it matter that it's a Limited Company? It's been too long since I was in practice to remember

 

[Isedo]

Do you have other evidence of payment? eg emails, screenshots?

If the course is to extend your exisiting knowledge then it is deductible, for example you want to improve your marketing skills. If you are planning to open a new marketing business then it is not deductible.

Yes, I paid him through my online banking.

 

[paulears]

Scalloway's point has always seemed really strange to me - training to make you better is a legit expense, but as new things enter the market, you can't expand your skill base by offereing new services. Is there any logical reason for this?

 

[STDFR33]

@Scalloway Does it matter that it's a Limited Company? It's been too long since I was in practice to remember

No.

However, the conditions set out in s250 ITEPA 2003 would have to be met to stop a benefit arising.

 

[STDFR33]

Scalloway's point has always seemed really strange to me - training to make you better is a legit expense, but as new things enter the market, you can't expand your skill base by offereing new services. Is there any logical reason for this?

As a sole trader, you are the business.

For example, if you are not an electrician but pay for a electrical course to enable you to trade as an electrician, the course is capital expenditure and not allowable in the computation in trading profits.

 

[Isedo]

Thanks for all answers folks. Regarding the no invoice issue? Is the bank statement ok? I mean the proof of the payment.

 

[Mr D]

But why can be not provide an invoice?

 

[Isedo]

No idea why he is not able to give it to me...as I told before, maybe he is not tax registered?

 

[Mr D]

No idea why he is not able to give it to me...as I told before, maybe he is not tax registered?

It sounds dodgy.

Not being tax registered would not prevent giving an invoice. A sole trader could give you an invoice now and register for tax in a few months time.

 

[MikmakFer]

As a sole trader, you are the business.

For example, if you are not an electrician but pay for a electrical course to enable you to trade as an electrician, the course is capital expenditure and not allowable in the computation in trading profits.

I'd disagree with this - you can capitalise training i.e. write down over x years if it is Company unique and cannot be transferred elsewhere which this obviously isn't the case - all that means is that it will be expensed in the current year which from a tax perspective, is more beneficial.

If the outcomes will benefit the business then yes, it's a business expense. If you go and do a marketing and sales course and it will improve the marketing and sales functions of your organisation (regardless of size) then that's a business expense. The fact that in theory, the Company could pay £3k as an example and you could leave next month is irrelevant as this is a risk a Company takes which is normally managed by a recovery period stated in the contract i.e. if you leave within 3 years you need to pay it back.

In terms of the invoice, tell him you need an invoice. I would presume that he's not providing one because he's not registered with HMRC as self employed and is trying to fudge the taxman. Just use the bank statement as proof of expense if he can't provide.

 

[Isedo]

In terms of the invoice, tell him you need an invoice. I would presume that he's not providing one because he's not registered with HMRC as self employed and is trying to fudge the taxman. Just use the bank statement as proof of expense if he can't provide.

It's a guy from USA I did with few one to one sessions online via skype.
So the bank statements it's just fine?

Or may I ask him just to make some kind of paper-ish invoice even if he is not (maybe) tax registered in his country? (This one i'm not sure of...he is not really collaborative, answers like once every 2 weeks).

THanks folks.

 

[STDFR33]

if it is Company unique

If you are talking about a company, then my sole trader example is completely irrelevant because the rules are different.

The rest of your post is also rubbish.

 

[MikmakFer]

Isedo advised about putting expenses through his Ltd. Give it a read through before you post absolutely irrelevant examples then.

Would be keen to hear what else in my post is rubbish? Probably would be more useful for the Isedo to understand what's being debated rather than "the rest of your post is rubbish" which isn't very helpful for anyone...

 

[Isedo]

Isedo advised about putting expenses through his Ltd. Give it a read through before you post absolutely irrelevant examples then.

Would be keen to hear what else in my post is rubbish? Probably would be more useful for the Isedo to understand what's being debated rather than "the rest of your post is rubbish" which isn't very helpful for anyone...

Thanks MimakFer for going back to my problem :-D

So if I understand correctly, I can deduct courses from my Ltd which are relevant to my business and if I don't have an invoice, I can prove the expense with the bank transaction. Is that correct?

So if I understand correctly and since I'm not claiming back Vat, the important thing is not the invoice but the proof of payment. Is that correct?

Thanks to anyone who is helping

 

[MikmakFer]

I'd agree with you on all counts.

That being said, I'd be keen to hear @STDFR33 response as there may have been something I'm missing...

 

[STDFR33]

Isedo advised about putting expenses through his Ltd. Give it a read through before you post absolutely irrelevant examples then.

The example to which you refer was in response to Paul, and not the OP. It illustrated the difference in tax position between a sole trader and a limited company on the same expense.

The answer was given in my first post. To spell it out, the expense is allowable for corporation tax purposes. However, a benefit in kind may arise and you'll have to have a look to see if the conditions set out in s250 ITEPA 2003 are satisfied.

Would be keen to hear what else in my post is rubbish?

All of it.

 

[Isedo]

The example to which you refer was in response to Paul, and not the OP. It illustrated the difference in tax position between a sole trader and a limited company on the same expense.

The answer was given in my first post. To spell it out, the expense is allowable for corporation tax purposes. However, a benefit in kind may arise and you'll have to have a look to see if the conditions set out in s250 ITEPA 2003 are satisfied.



All of it.

Thanks buddy for your comment. It's difficult for me to understand by the way, can u say it as to a 7 years old kid? Specially the part about s250 ITEPA 2003. Thanks.

I can be more direct. The course is about online marketing and we do online marketing in the agency (LTD). Thanks

 

[MikmakFer]

The example to which you refer was in response to Paul, and not the OP. It illustrated the difference in tax position between a sole trader and a limited company on the same expense.

The answer was given in my first post. To spell it out, the expense is allowable for corporation tax purposes. However, a benefit in kind may arise and you'll have to have a look to see if the conditions set out in s250 ITEPA 2003 are satisfied.



All of it.

Very mature response and very helpful - I'm sure the community will be in awe of the way you put arguments across

I wouldn't even call this a benefit in kind because it's a job specific requirement (job being a director and the Company requires this as a function).

I'll leave my opinions at that for fear of this turning into handbags at dawn, I'll clarify Isedo that these are opinions of individuals so if you come away from this still unsure then either do some research yourself or alternatively go see an accountant and they'll set it out for you.

 

[STDFR33]

The legislation is here:
http://www.legislation.gov.uk/ukpga/2003/1/section/250

In short, you will pay tax as an employee on a course unless the work related exemption applies. The cost to the company is allowable for corporation tax purposes regardless.

As you will be undertaking the marketing for your company, then the marketing course is work related and the exemption applies, therefore no benefit arises.

 

[STDFR33]

I'll clarify Isedo that these are opinions of individuals

Some individuals backing their opinions with the relevant ligslation, others continuing to post nonsense.

 

[Isedo]

Hi there, sorry, no idea what the s250 ITEPA 2003 is. Can you please kindly help in on this one?

The course is about online marketing and we do online marketing.

Since there is no invoice to proove it but only a bank transaction to a person named X, woukd that be still ok?

From what I read folks, and thanks again to whom is giving me great insights (thanks again i appreciate your time), the LTD CAN deduct this expense.

Sorry for being blonde, I'm just a little bit slow on this matter (and I'm blond).

 

[MikmakFer]

Some individuals backing their opinions with the relevant ligslation, others continuing to post nonsense.

There's the handbags, it's a Friday and you need to chill out.

Some individuals backing their opinions with relevant legislation (spell check!) and other continuing to post nonsense based on personal and professional experience i.e. someone who has been there and done it.

 

[STDFR33]

Hi there, sorry, no idea what the s250 ITEPA 2003 is. Can you please kindly help in on this one?

The course is about online marketing and we do online marketing.

Since there is no invoice to proove it but only a bank transaction to a person named X, woukd that be still ok?

Yes, I’d file a copy of the bank statement with the relevant line highlighted and attach any documentation that shows what the course entailed, if possible.

 

[STDFR33]

someone who has been there and done it.

Must be right then

 

[Newchodge]

Anyone seen the popcorn?

 

[MikmakFer]

Anyone seen the popcorn?

 

[STDFR33]

Anyone seen the popcorn?

The least you could was bring your own if I’ve provided the entertainment. Jeez.

 

[Philip Hoyle]

A line on a bank statement isn't good enough, no. You could have bought anything with that. If there's no invoice, then you need to keep a record of the service, i.e. emails between you and the supplier confirming the details of the course, costs, etc, course notes, etc.

 

[Alison Moore]

I would print off/scan etc your requests for an invoice and a copy of the bank statement to show that your incurred the expense. If he is working 'on the side' and can't give you an invoice then that is his problem, not yours and you shouldn't have to hide the expense just because he won't issue an invoice.

 

[Isedo]

Hi folks, so I have an update on this one. The guy is telling me he is not tax registered and he can send me a generic receipt from a "pen name" he is using. Would that be ok?

So at the end I will have a bank transfer and this receipt...not on his name but a some "pen name"...

Agreed that it sounds dodgy from his side, how it looks for my needs? Could it be ok?

 

[Scalloway]

Accept it and send in a Suspicious Activity Report.

https://www.nationalcrimeagency.gov...rrorist-financing/suspicious-activity-reports

 

[CA85]

The guy is telling me he is not tax registered and he can send me a generic receipt from a "pen name" he is using. Would that be ok?

Are you are happy to assist him in his criminal activity?

Hopefully the answer is no and you are planning to report him. I would not accept an invoice I knew to be fictitious (well ok, I might let him give me a copy but I would not be relying on it in my books and records). As mentioned previously, keep a copy of the bank payment details and any emails/correspondence/course materials as evidence that the expense was for a training course.

 

[Adam93]

Complete a suspicious activity report to SOCA and don’t deal with this person again. I am sure you don’t want your business to be tarred with the same brush.

It is your responsibility to keep adequate records. I would want to see more than a transaction on bank statements unless it was to a mainstream retailer (I.e. B&Q, not Mr Joe Bloggs as it could be anything...). HMRC can issue fines of up to £3,000 per year for inadequate records.

As for training, as a limited company employee training is always deductible and probably a tax free benefit for the employee.

If an unincorporated business, training for new skills is capital expenditure and no tax relief is available (you can’t write it off over a number of years or make up any other rules that suit your needs).