Question:

“I am a self employed graphic designer and I am looking to change my business and become a fitness instructor. I will be undertaking some training classes and buying various books to get me up to speed. Will I be able to claim these training costs as a business expense on my tax return?”

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Answer

We have explained the criteria for what training costs are allowable when you’re self employed previously in our self employed expenses guide – essentially¬†in order for any form of training to be allowable for tax it must be incurred wholly or necessarily for the purposes of the trade. In the case of your graphic designer business this would be courses that relate specifically to that trade.

In this instance, the cost of training and books to become a fitness instructor are not incurred wholly and necessarily for the purposes of your graphic designer business and as such would not be allowable for tax purposes.

Learning a new skill or qualification before you start up in business would be considered capital expenditure in the eyes of HMRC against any future fitness training courses you were to run and would not be allowable for tax relief.

For tax planning purposes, if you are serious about becoming a fitness instructor, you may wish to start trading in some capacity before commencing the course. If you are in a position to earn some income as a fitness instructor before incurring any course costs it may be possible to argue that you are maintaining work-related training or continuing with professional development. The costs of this course may then be tax deductible in your separate fitness instructor business but this is not guaranteed and would need to be discussed with an accountant.

The above advice is for the self employed – the treatment of training costs when you trade through a limited company is very different.