Is a CV rewriting service an allowable business expense as a limited company director?

It’s a worthwhile question to ask on the back of the labour market being described for some as “hopeless” – ‘Is a CV rewriting service an allowable business expense as a limited company director?’ But, writes chartered accountant Matt Fryer, managing director of Brookson Group, a People 2.0 Company, first things first.

What is a CV writing service?

A CV writing service typically encompasses a team or company that offers a professional refreshing or outright reconfiguration of your CV or résumé to make it more likely to land you work.

The service may employ several CV writers, along with support staff, marketing teams, sales teams, and more to help you emphasise your experience, qualifications and skillset on your CV.

The costs associated with a CV writing service often reflect the overhead expenses, expertise, and quality assurance provided by the company. And like everything, it’s fair to assume costs have gone up!

Just for reference, a CV writer is perhaps a little different. They too specialise in making your CV 'market-ready' by writing it afresh or improving it, but they work independently.

Here's the nub of the CV-expenses issue

With either if you're a contractor-director, the key benefits are that it enables you to optimise your CV for your target roles. It also prepares you for interviews to obtain contracts in your company -- or as an individual job seeker.

And spoiler alert! This is the nub of the issue as to whether a CV rewriting fee is an allowable business expense if you’re a limited company director.

What HMRC says about allowable expenses as a limited company…

The HMRC rule, in summary, is that a deduction is allowed for expenses where it is incurred ”wholly and exclusively” for the purpose of the trade.

The rule works by prohibiting expenses that are not “wholly and exclusively” incurred, stating:

“In calculating the profits of a trade, no deduction is allowed for – expenses not incurred wholly and exclusively for the purposes of the trade.”

Unlike the equivalent rule for employment expenses, there is no requirement that the expense is ‘necessarily’ incurred. This means that as long as an expense is incurred for the purposes of the business -- and only for that purpose, a deduction is given.

There is no requirement that it is necessary to incur the expense for it to be deductible.

Is there duality of purpose when considering if a CV rewriting fee is expense-able?

Simply explained. ‘duality of purpose’ is when an expense has both a business purpose and some private element too.

By this we mean, could the CV writer cost benefit you both in business and personally?

HMRC could consider that you may be able to use the CV both for contracting roles (outside IR35) in your company, and also for individual job roles (or where inside IR35 working through your company).

Therefore, if HMRC makes that consideration, a CV rewrite will meet the duality of purpose rule and be disallowable.

Yet in many situations, this can be a grey area. And so we normally apply the “wholly and exclusive” test before ultimately deciding.

The “wholly and exclusive” rule means that any expense must be “primarily for business purposes” to benefit from tax relief in the company.

Does CV writer expenditure meet the 'primarily for business' requirement?

If the CV writer draws on your expertise that you provide as a freelance contractor working in your limited company, this would of course, be beneficial for the purposes of trade and as such, would help to drive up trade accordingly which would “meet the primarily for business purposes” rule.

Upon the drafting of the document, you should consider ensuring that the CV’s principal focus is business-related in this respect, whereby personal references are merely incidental to the overall aim of the CV. Coordinating with the rewriter would therefore be helpful here, so they understand where you want the focus to be, and so you can avoid sleepless nights for fear of HMRC!

N.B. Enhancing your ‘soft’ skills could also be clearly beneficial to your company’s trading activity too.

What about CV rewriting expenses if umbrella company working or inside IR35?

For the cost of CV rewriting services from an individual or advisory to be allowable as an expense of employment, it must be “wholly, exclusively and necessary” in the performance of your duties.

This means that any person performing your role would have to incur the expense and that the expense is incurred while performing your duties, rather than putting you in the position where you are able to perform those duties.

As CV writer expenditure is clearly not necessary to the performance of your duties when inside IR35 or operating through an umbrella, then this would not be an allowable expense of employment.

TL;DR. Can I expense CV rewriting? Yes if two conditions are met…

CV writing costs are a grey area for expenses.

However, to be on firmer footing with such a claim, you’ll want the company to be able to demonstrate:

• it is for the purpose of trade, and;
• it is “primarily for business purposes” -- by virtue of the document being business focused

Still grey? Get an accountant (not a CV reviewer) to help see you through it all

If the two conditions immediately above are met, then the expenditure incurred should be allowable. However, with more grey areas here than many directors will be comfortable seeing through alone, I would advocate taking specialised advice from a contractor accountant, and not just with CV rewriting fees actually, but wherever you have concerns regarding any expenses queries and their allowability in HMRC’s eyes.