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bigduckontax
bigduckontax, Accountant
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Reclaiming VAT for courses attended

Customer Question

If one attends training courses, under what circumstances can one reclaim VAT?

Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

Providing the training course is wholly and exclusively required for the execution of one's business then the VAT paid may be claimed as input tax in the same manner as any other business expense. Here is the HMRC directive on the when VAT cannot be reclaimed:

'When you cannot reclaim VAT

There are a number of situations where you cannot reclaim VAT that you have paid.

You cannot reclaim VAT paid for goods and services that are used for non-business activities. This includes:

Goods and services that are bought for your personal use

Cars that are not used exclusively for business purposes (and any fitted accessories and delivery).

Goods and services for non-business use bought by charities or not-for-profit organisations.'

I do hope I have helped you with your query.
Customer: replied 3 years ago.

Thanks for info Keith.


 


More specifically, I attended a training to help me start a business.


 


If I start the business:


 



  1. Can I claim for training I attend before starting the business?

  2. How do I prove the training is for business?

  3. What's the time limit to claim within?

Expert:  bigduckontax replied 3 years ago.
Here is the HMRC advice [edited] on this matter:

'The relief extends only to expenditure which:

Is incurred within a period of seven years prior to the commencement of the trade, profession or vocation, and

Is not allowable as a deduction in computing the profits of the trade, profession or vocation but would have been so allowable if incurred after the trade had commenced.'

The 'wholly and exclusively' test is applicable. The requirement to prove the training requirement should be pretty obvious from the nature of both the course and the business. I cannot see an overwhelming problem here.

In most cases such costs are simply put through the Profit and Loss account.
Customer: replied 3 years ago.

Thanks. I don't understand this jargon: "Is not allowable as a deduction in computing the profits of the trade, profession or vocation but would have been so allowable if incurred after the trade had commenced."

 

Does it simply mean that VAT can only be claimed if training takes place after the business starts? And I'd have to place it under expenses?

 

Also, do I have to be registered as a company, or can I still reclaim VAT even if I'm doing a side business as self employed in addition to my full time employment.. obviously filing tax return.

Expert:  bigduckontax replied 3 years ago.

No it doesn't, all it really means is that if would be allowable in the ordinary course of trade (ie exclusively and necessarily etc) when actually trading it would equally be allowed as an expense before the trading actually started also.

 

VAT laid out before the business commences is an input in the first VAT return submitted. For book keeping purposes you could post it as a preliminary expense, but if the amount is small why bother with all that palava, just put it through the Profit and Loss account as an expense.

 

You o not have to operate as a limited company. Employment and self employment can run in parallel, it's perfectly normal

bigduckontax and other Tax Specialists are ready to help you
Customer: replied 3 years ago.

Very well, thank you Keith.

Expert:  bigduckontax replied 3 years ago.
Pleased to be of assistance.

Thank you for your support.