Training Expenses: what you need to know
Training Expenses: what you need to know
The most notable point to watch for is that tax relief is available only when the training is wholly for business purposes.
November 27, 2023

You would expect that claiming training expenses would be straightforward and clear. However, when it comes to CPD, training or seminars there are a few grey areas as to what you can and cannot claim. Unfortunately, not everything qualifies for tax relief, so we’re here to make things a little clearer.

The most notable point to watch for is that tax relief is available only when the training is wholly for business purposes. As such this refers almost exclusively to courses and seminars that update existing knowledge or training required to maintain membership of a professional body.

What about new knowledge? Well, this is where it starts to become more complicated. If for example legislation changed requiring you to attend a training course in order to comply with the new legislation this would be allowable. If, for example, you wanted to do that sky diving course HMRC would recognise this as a new skill outside of the scope of business and would not be allowable.

The rules, however, do vary depending on your status. We will briefly cover the implications of being self-employed, a sole trader or limited company.

Self-employed & Sole Traders

We will first look at self-employment, in this case HMRC will look at the trade that already exists, if the training relates to CPD and other skills relating to the business then it will be allowable.

If you’re trading as a sole trade then any training that relates to CPD or refreshing your skills that you already possess are treated as a revenue expense. Training that provides a new expertise in order to provide a new service/trade will likely be classed as a capital expenditure.

Training in Limited Companies

When providing training to employees there may be reporting obligations in relation to national insurance and tax. Any training that is provided to employees or directors that focuses on improving their knowledge and skills to support the business will be allowable. This even extends to training that is provided in order to provide a new trade via the business.

A notable point to watch out for is that tax relief is not always available for degree level training as HMRC would deem this to be providing new skills and knowledge. This can be argued, however, if it can be shown that the training is supporting skills that were previously developed which in the case of dentistry everything has already been covered at a basic level in your initial training.

Another case to watch out for is if the training isn’t work related, again we will take scuba diving as an example, then the cost would be a benefit in kind and would need to be included on a P11D, this does depend on if you arranged the training or the employee did.

Costs incurred for training

Costs incurred as part of training may also be available to claim tax relief, examples of these are:

  • Transport (if the place of training isn’t your usual place of work)
  • Accommodation (if you must stay overnight)
  • Subsistence (food & drink)
  • Associated training costs (books, etc)

You may see that training is not all that straightforward so if you have any questions get in touch. We’re here to ensure that you do not get caught out or left out of pocket.

The information contained in this article is based on the opinion of Hive Business and does not constitute formal tax advice. Any tax outcomes will be based on individual circumstances, tax legislation and regulation, which are subject to change in the future. You should seek specific advice before embarking on any course of action. Hive Business does not provide regulated Financial Advice, including advice on investment, insurance or lending products or their suitability for you. This article is provided for information only and does not constitute, and should not be interpreted as, investment advice or a recommendation to buy, sell or otherwise transact, or not transact, in any investment including Bitcoin and other crypto. Any use you wish to make of any information contained within this article is, therefore, entirely at your own risk.

By Andre Alderson Accountant
If you have any questions or comments about this article, please get in touch.
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