When it comes to reducing your tax bill, claiming advice as a business expense can be a practical way to do so. However, the HMRC rules on the types of training you can and cannot request are very strict. This is because they want things to be fair for all members of the self-employed community. To be fully tax-deductible, your coach should only advise you on business matters.
If your coach is a life coach, a coach who advises you on both business and personal matters, only the business portion of your fee will be tax-deductible. A business coach would be deductible. A PayPal receipt should be sufficient to determine that the amount was paid, but it would also keep a copy of your contract or agreement to prove that you are the previous type of coach. Training programs like this usually include vital advice, but they also include business consulting and mentoring.
All of these expenses are perfectly suited to be tax-deductible because the only objectives and intentions are to improve work performance. Your investment in professional or executive coaching may be tax-deductible. It's a resounding example, so be sure to discuss your specific situation with a tax professional. Whatever your company's turnover, you should write down what you claim and how you calculated it as part of your business records.
Most of the work I do with business owners is based on training and education, rather than being called life coaching. It's up to you to substantiate a direct relationship between your current employment and training expenses. If your company's turnover exceeds 85,000 pounds sterling, you'll need to enter a breakdown of your expenses in the boxes set by HMRC and you'll need to include your work clothes. In his case, the main objective was to help his company and, therefore, he was able to use training as a taxable expense. This must be done with “accounting, legal and other fees” or “other allowable business expenses”.
Ireland is no different, but only if these services directly affect the company and contribute to business growth. Tax breaks for a private taxpayer also do not include counseling as an available service, as is the case with therapy or education (with the exception of computer and foreign language courses). You'll need to report the cost of training allowed in the self-employment section of your tax return. I provide both traditional training services as well as training and consulting services which are tax-deductible. When it comes to making deductions, most business owners are well aware of the expenses that the Internal Revenue Service considers “ordinary and necessary for businesses”.