As the Chancellor announces investment in training to address the skills gap how are you accounting for your company’s training?
Filling any skills gap in your organisation, by investing in improving the skillset of your employees, can widen the gap between you and your competitors and undoubtedly help to grow your business. From an accounting perspective such training could help you accrue some more immediate financial benefits too.
Often, a training programme can be claimed as a tax deductible expense.
That training would, of course, need to be proven to be pertinent to your work. That it is, in essence, continuous professional development, so it will add to skills and as a result be of benefit to the company materially, be that financial or in improving performance.
HMRC will look at the existing areas of business and provided the training undertaken is to update professional skills and expertise relating to the company, then this expenditure is normally tax deductible.
It defines work related training as any course or other activity which is designed to impart, instil, improve or reinforce any knowledge, skills, or personal qualities and that to be tax deductible, any expenses incurred must be "wholly, exclusively and necessarily incurred in the performance of" the employee's duties with their employer.
Yet, claims for the training needn't just be for employees, but your directors too. Depending on what the training is designed to achieve, limited company directors may claim if the training expands the services your business offers or even further your so called soft skills. These can be wide ranging too. From how to improve your management skills to time management, for example.
In short, if the training benefits the company, makes you a more effective employee or director and the business more productive, it can qualify as tax-deductible, so you should be able to claim for it.
To hear more about how GSM help its clients to invest in training while ensuring the costs will be allowable revenue expenditure against company profits, contact us on 020 7935 3793