Written by Dolan Accountancy for FCSA.
One of the greatest benefits of contracting is the fact that you are able to claim back on expenses made for the running of your business – but, are training courses an allowable expense?
Here, we explain the rules when it comes to claiming for training courses.
But first, let’s take a look at expenses as a whole:
Claiming expenses
As a self-employed professional, you will need to pay out for various costs in order to carry out your work and run your business.
Whether you’re a sole trader or limited company contractor, you’ll be able to claim back on these expenses and therefore reduce your tax bill at the end of each year.
However, this is only if they are ‘allowable expenses’ – it’s not possible for you to just claim back on anything and everything you fancy putting through as a ‘business expense’. Any item you wish to claim back on must be made ‘wholly and exclusively’ for business purposes.
You should always keep receipts or some sort of proof of purchase for an expense – HMRC could ask to see such evidence if they were to investigate your personal circumstances. It’s worth keeping these receipts for at least 6 years.
What type of expenses can I claim?
There are basic expenses that the majority of self-employed workers are able to claim, however, there are some expenses specific to the type of contractor.
For example, a limited company contractor will have additional expenses due to having certain running costs that only apply to them, whereas an umbrella company contractor is, in general, unable to claim for expenses due to them being an employee of their umbrella.
There’s also the IR35 legislation to consider (the bane of many self-employed workers’ lives!) – if a contractor is deemed as being ‘inside’ IR35 then unfortunately, they won’t be entitled to the same benefits as someone who falls ‘outside’.
Typical allowable expenses, for a contractor working outside of IR35, include:
- Office costs
- Uniform needed for work
- Travel costs
- Accountancy fees
So, are training courses an allowable expense?
Depending on the sector you’re in and the type of work you do, you may need or want to learn more about your field and further develop your skills and knowledge by taking part in training courses.
Not only is this useful on a personal level, but having a wider skillset could possibly increase a contractor’s earning potential too.
Training courses are an allowable expense, however, there are rules as to what type of training you can claim for – you can only claim for a course that is linked to your current occupation and is to be used to expand and improve the skills and knowledge you use in your current line of work.
It isn’t possible for you to claim back on a course that has zero relation to the industry you’re working in.
Dolan Accountancy
With years of experience, Dolan Accountancy provides just about everything you need in an accountancy company, all wrapped up in one low-fixed monthly fee.
Award-winning, Dolan Accountancy offers a combination of experience and great service and is both fully FCSA accredited and an APSCo Trusted Partner.
