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September Questions and Answers
Newsletter issue - September 2022
Q. I am a self employed dentist wanting to expand my knowledge and specialise in a particular branch of dentistry. I have discovered that there is a part time course at my local university which will enable me to continue working. The cost is £25,000 and it will take three years to get the qualification. Can I claim the cost of the course against my self employed earnings?
A: The real question to consider is whether the expenditure is capital or revenue. Expenditure incurred by the proprietor of a business on training courses for themselves is revenue expenditure if the course merely updates existing expertise or knowledge. Expenditure on a course which provides new expertise or knowledge is capital. The course appears to be for the acquisition of new skills, rather than the updating of existing ones and if this is the case then the expense is capital and disallowable.
Q. My husband and I are joint partners in a business for profit sharing purposes. The work requires me to do a lot of travelling on business and my husband accompanies me occasionally. As my husband is not involved in the business purpose of these trips (e.g. meetings) can any travel expenses be claimed?
A: To be allowable the cost must be 'wholly and exclusively' for the purpose of the trade. As your husband does not take any active role in the business you should be disallowing 50% of any travel costs, eating out, accommodation etc.
Q. We have had a rental property for some years and now that we are retired, we wish to live there and rent out our (original) main residence. How long must we live in a property before it becomes our main residence?
A: There is no set number of months or years before principal private residence can be assured to apply but what needs to be shown is that you are moving to the property and intending to stay for the long term. Possibly six months to a year would be a reasonable time. You should also register on the electoral role for the area of the country where you intend to reside and ensure that HMRC is aware of your change of address. Once the property is established as your main residence should you ever wish to sell the property you will be able to benefit from the final nine months exemption under principal private residence relief.
What our clients say about us...
"Paul has provided accountancy services to my company for 2 years now. I can recommend Paul very highly; his skills as an accountant are highly detailed and professional and he is always available to provide advice. One aspect of the way Paul works that I greatly appreciate is a preference to meet face to face when there is a detailed conversation to be had. I personally find this more productive and is a benefit of working with a small accountancy firm that you wouldn't get with the large faceless providers."
ALISTAIR FAIRWEATHER - PROGRAMME & PROJECT MANAGER, DELIVERING/RESCUING I.T. 7 BUSINESS CHANGE WITH BUDGETS UPTO £50M INC SUPPIER MANAGEMENT
"I couldn't ask for more from Paul as an Accountant. Paul has been accountant to Work Relief Charity Recruitment for just over a year now and is proving an invaluable asset. Accurate, knowledgeable, flexible with an emphasis on service delivery, I would recommend Paul's services to any organisation looking for an accounts professional."
Neil Price - Managing Director at Work Relief Charity Recruitment
"Paul was a referral from a family member when I started my business 2 years ago. As this was the first time I had ever run my own company I was totally clueless over the financial side of matters and was worried that I may have made mistakes in any of my accounting. I needn't have worried as after enaging Paul for a set monthly fee he was always there on the end of the phone for all sorts of questions I had and no matter how trivial they were Paul gave me all the information I required and more and did an excellent and painless job at the end of my first year! Couldn't ask for any better to be honest. Just two words - hire him!!!"
Lee Westrap MBCS - Director - Bulldog IT Services
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