Q. I run my own consulting company in the UK, which pays my Brazilian wife a small wage for answering the phone and preparing marketing materials. Can the company pay for her to complete an advanced English course at the local college?

A. Training for any employee can be charged through the company if it is relevant to the employee's duties or future duties. An ability to speak and write correct English is necessary for your business so the proposed English course is work-related training for your employee. Your company can pay for the course, and receive a tax deduction for that cost. There will be no benefit in kind charge for your wife. The company can also pay for travel to the course. You should list the duties your wife performs for the company, and both sign the document as part of her employment terms with the company. This description of her duties will justify the training cost, should the Taxman ever ask.

Q. My company provides website hosting for businesses based in the UK and in other countries. For VAT purposes is this treated as a sale of goods or services?

A. There is an easy rule of thumb to decide whether something is goods or services for VAT purposes: can you pick it up and hold it? Yes: goods, No: services. Website hosting can't be physically picked-up therefore it's a service. There are some complex VAT rules for selling services across international borders. You need to know whether your customer is in business or not. Broadly if the customer in another country is a business you do not charge VAT. We need to talk through the detail of what you declare on your invoice and what evidence to collect from your customer.

Q. I am self-employed personal trainer. I pay rent to various local gyms where I train my clients, supply my own uniform and make my own appointments. I have to look the part to get work, so I take body-building supplements. Can I claim the cost of those supplements as a business expense?

A. The supplements are a form of food, and as such it has a dual purpose; to keep you healthy and prepare you to undertake your work. So it is very unlikely that the Taxman would agree that your body-building supplements are tax allowable

Q. Is it true that my company can purchase a top-end touring bike plus safety gear, for me to use without any restrictions?

A. There are restrictions. For you to receive tax and NI free use of the bike your company must offer the use of bikes to all its employees, but the same quality of bike does not have to be offered to every employee. The bikes should be used mainly for work related journeys, such as getting to work, or travelling between different work sites, but personal use is not prohibited. Safety equipment can be provided by the company with the bikes. However, remember the bikes must remain the property of the company, or be leased directly by the company. There are tax implications if the company gives you the bike outright.

Q. I have decided to become VAT registered. Can I claim the VAT back on the van I bought two years ago, which I still use for my business?

A. You can reclaim VAT on goods and services purchased before VAT registration, but there are different time limits for goods as opposed to services. The VAT paid on goods held at the date of VAT registration can be reclaimed if they were purchased within four years before the registration date. VAT on services can only be reclaimed if the services were supplied for the on-going business with 6 months before the VAT registration. The van is classed as goods, so you can reclaim the VAT on purchase.

Q. I am employed by my company M Ltd, and my wife's company T Ltd. M and T have completely separate trades and operate independently. I currently take no salary from M Ltd and have a modest salary from T Ltd. However, HMRC have split my personal allowance 2/3 to the PAYE code issue to M Ltd and 1/3 to T Ltd. Can I get this changed, and if so how?

A. All you need to do is ring HMRC on the number shown on your PAYE code notice and ask them to change your PAYE codes. You will need to have your NI number to hand, and estimates as well as the expected level of dividends, interest or other income to be received in 2013/14.

Q. I've heard about the great tax breaks available under the SEIS scheme. Is this something I can use for my business?

A. The seed enterprise investment scheme (SEIS) provides investors in small companies with 50% income tax relief, and an exemption from tax for 50% of the gains they reinvest in SEIS shares (for 2013/14). However, you can't use SEIS to invest in a company you control, as the investor and his associates (basically close relatives), must not own more than 30% of the company. The trade undertaken by the company must also be less than two years old, so to use SEIS the company has to be undertaking a new venture, and be a new clean company.


If you have an idea for a new business and you are willing to involve other investors, you may be able to use SEIS to fund that business. But please talk to us first, as there are a number of trades that can't use SEIS, and other conditions to meet.