I'm not going to give any advice on this one (it's a minefield), but I did want to share a couple of views on the subject...
I used to run a small company which was reasonably successful but began to face very tough competition from several larger firms. Eventually I gave it up, but that's another story...
Anyway, at the time I considered doing a CPL/IR and having the company pay for it. The reasoning was that I was spending ridiculously large amounts of time in the car and that by using a light aircraft it would allow me to travel further in less time, resulting in more work done and (hopefully) higher revenue. It would also have allowed some diversification in employment.
Before taking the bold step of going ahead and doing it I ran the scenario past my accountant. He had a good look through a basic 'business plan' which projected the return on investment for the company. After some consideration he said that I'd almost certainly be hit for benefit-in-kind on the training because it would make me personally 'better off' in terms of marketable skills. He also reckoned that the HM C&E would not be happy about the me reclaiming the VAT.
I wasn't happy with this as I felt that I was being stung purely because someone else might decide that I was 'trying it on'. I argued the point with my accountant and eventually he said that I could try it if I liked and that he'd do battle with the IR and C&E as necessary - however he did warn me that the costs of doing battle would probably exceed the savings I would have made in the first place, so faced with that, I never did it.
However... since that time I have worked with several companies and I have seen some amazing 'expense' claims being authorised, on which not only VAT is reclaimed but the individual concerned is not hit for B-I-K. I've seen people sent on training that was unrelated to their business.
It seems that the tax collectors are out to nail the small guy, even if his claim is genuine. They use their powers to intimidate at every opportunity... the dreaded VAT inspection - and as Sensible said, they *always* find something, no matter how clean you think you are.
If I was in the position to do it again, I'd probably go for it and argue it out if necessary. As long as you are 100% within the rules you ought to be allowed do it, but things just don't seem to work that way.
Ok, rant over.
Ivan.