Training Costs
Recently I had the pleasure of meeting and taking on a new client. This young lady was a recently qualified chiropractor and, as is almost mandatory in such a conversation, I was asked if the course fees were tax deductible. The standard answer is that the costs of acquiring a skill set that enable you to commence a profession are not tax allowable, but the cost of mandatory CPD or other updating of skills are. She accepted this, not really having much option, and we moved on to other subjects.
Just as we were finishing our meeting, she told me that her father, who has been a chiropractor for many years, was looking for a new accountant and would I be interested in speaking to him. I asked if he had sponsored her through college and she said no, but he had helped her out financially…
A few weeks earlier I had met up with an osteopath who had been trading for 20 years. He had put 2 of his children through the BSO and a third through another accredited osteopathy training college. His accountant had told him that none of the costs were allowable….
Last year I was giving a talk in Scotland and a delegate said that their accountant had categorically told them that there was no way to claim for putting their child through the BSO…..
I have to say that I disagree with the accountants who declined to make the claim for college fees. As with everything else in tax law, provided the correct paperwork is in place, then HM Revenue & Customs cannot disallow the expense claim. So what is the correct paperwork: -
· The child must be an employee of the parent (or the parent’s company)*;
· There must be a formal contract of employment;
· There should be a letter to the child not only offering employment, but also confirming that the employer will sponsor the person through college and will meet the tuition fees and related costs;
· The relevant fees and related costs should be paid from the employers bank account;
· The employee should receive the appropriate year end PAYE documentation as would any other employee;
{* Parent could also mean uncle, aunt, cousin, sibling or life partner}
Training costs for an employee are fully allowable to the employer.
Any questions, please feel free to contact me.