Expenditure On Training Course For A New Business

I recently started my own self employed business as a personal trainer. I incurred a lot of expenditure on a course to enable me to work in this industry. Can I treat this as an expense when working out my business profits, even though it has been incurred before I started trading?  

1st January 2009

When you start a new business, you are entitled to claim any expenses which relate to the business within 7 years prior to the start of trading. However, for the amount to be allowable against your profits you need to consider whether the amounts are in fact classed as “revenue” expenditure.

HMRC state that any expenditure that provides new expertise or knowledge to the proprietor should be disallowed for tax purposes, especially when it brings into existence a recognised qualification. This would seem to indicate the expense you incurred on your training course is defined as “capital” and will be allowable when the business is sold, rather than against profits as pre-trading expenditure.

Should you attend more training courses to update your current expertise this can, for the self-employed, usually be regarded as “revenue” expenditure and is therefore deductible provided it is incurred wholly and exclusively for the purpose of the trade.

By Jo Nockels

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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