Training costs?

mikeassured

Hi

We have a property maintenance Ltd company, and my husband wants to become qualified as a gas engineer. He is planning on doing a course which will cost £2000 :eek:

Do you think we could put the cost through the company to go against our tax?

Thanks

Sue

Spendalot_2

Assuming that your husband is an employee of the Limited company, work related training is tax deductible, and cn go through your company.

Work related training is defined as

' any training course or other activity which is designed to impart, instil, improve or reinforce any knowledge skills or personal qualities which

are, or are likely to prove useful to the employee when preforming his/ her duties,or

will qualify or better qualify the employee to undertake the employment

So, in short it seems that the answer is yes. I refer you to Inland revenue booklet 480, which has more information.

WHA

Be careful, though. To claim the training expenses, you are effectively declaring him an "employee". One of the biggest benefits of being a limited company arise from him being a "director" rather than an employee - i.e. being able to pay a very low wage and high dividends to save NIC. If you declare him as an employee, he would need to be paid the national minimum wage which would increase the NIC payable by him and the company and reduce the benefits of being a ltd co in the first place. You need to do the sums - compare the tax relief on the training costs against the possibility of having to pay employees and employers nic on national minimum wage for him.

pchelpman

Interesting thought, WHA.

I know this doesn't apply in every case but, so far as I know, most directors of small companies wouldn't be working under a formal contract so wouldn't be bound by the the NMW rules.

For example ...

http://www.emplaw.co.uk/researchfree-redirector.aspx?StartPage=data%2f09102000.htm