Further Learning

MooreAccounts

Hi all,

I'm looking to progress and start CIMA. The question I have is would these costs be allowable expenses on a sole trader return? Is the CIMA viewed as ongoing training in the accounts trade and allowable, or learning something new therefore capital?

If allowable, would that then also go on to include exemption fees?

reader

Depends if you are a sole trader/self employed (disallowed) or limited company (allowed):

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim47080

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim35660

Via a ltd company the training would simply be staff training which is generally allowable, i.e. an accountancy firm paying for its employee's ACCA/ICAEW/CIMA/AAT training.

Via self employed (because there is no separate legal entity status) there is no concept of staff training for the main sole proprietor and therefore the cost of studying for a new qualification would probably be seen to be creating an enduring benefit for the owner rather than a genuine business expense. However updates once qualified are allowable- even for a sole trader.

reader

Update: 7 February 2018: Looks like there are currently groups lobbying the Government to extend tax relief for new qualifications to sole trades as well in the future:

"Ongoing training and skills development are major issues for the self-employed, and the Government can help by making training tax deductible for them (as it is for employees) and by collating and certifying reputable courses to help the self-employed find and choose the right training."

https://www.ipse.co.uk/our/news-listing/ipse-welcomes-response-to-taylor-.html

MooreAccounts

That's a huge help @reader - thanks for the links! Will make for some good reading whilst I'm snowed in...