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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.

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