Tax relief on training courses

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Introduction 

As a UK contractor or business owner running your own company, when is training a business expense? Indeed, if you’re a UK limited company contractor, when are training costs tax-deductible? When you work for yourself, can you write off training as a business expense for your company? Further still, when we consider are courses tax-deductible, will they be allowable for Corporation Tax purposes? Indeed, these are key questions for UK contractors as many will ask can I claim tax relief on training courses. Basically, when you’ve your own company, training for business is important in any industry and as a contractor, you or your staff will likely attend a professional business training course from time to time. Therefore, as part of any course that you or your staff attend, you’ll incur the associated cost. Therefore, you may ask your contractor accountant how do I claim professional training expenses on taxes?

In this guide, we’ll look at while you’re UK contracting, when are training costs tax-deductible (limited company). What’s more, we’ll consider when are training courses tax-deductible for self-employed. Also, besides considering can you claim training courses on tax, we’ll consider the different types of training methods for businesses. Further to this, we’ll take a look at are online courses tax-deductible. Furthermore, we’ll consider do you receive HMRC tax relief on training where you attend an actual contractor course in person. Another good article this site is our guide to UK contracting. This contains lots of insights into how to be tax-efficient when working through your own company.

Initial thoughts -tax relief on training courses

Improve your skills

While contracting through your own business, let’s consider how to claim professional training expenses on taxes. As part of your day-to-day work in the business world, you may need to brush up on your skills from time to time. Improving an existing talent or skills will assist with your personal development. Basically, this may give you a crucial edge when you apply for new contracts. As a result, this may involve taking part in some professional training courses. What’s more, you may also need to take some contractor examinations in connection with this. Also, training in business will include such contractor courses and professional exams for contractors. Indeed, these will form part of your overall business training costs.

Therefore, when are training costs allowable for Corporation Tax? Also, as a professional, how do I claim professional training expenses on taxes? Most importantly, if you know what types of training you can claim as business expenses, this is good when you run your own company.

Common questions

There may be many common questions from UK contractors and small business owners alike regarding training for work reasons. Indeed, such questions in terms of when are course fees tax-deductible will include:

  • Are course fees tax-deductible?
  • Are business courses tax-deductible?
  • Can I claim training as a business expense?
  • Can training courses be claimed on tax?
  • Is training an allowable expense?
  • Is training a tax-deductible expense?
  • Can I write off training on my taxes?
  • Is professional training tax-deductible?
  • Can I claim for training on my tax return?
  • Is education a business expense?
  • Can I deduct education expenses for my business?
  • Is professional development tax-deductible?

Therefore, in this guide we’ll take a look at when companies can deduct the cost of training as a business expense or, when can a sole trader or employee claim a tax deduction for training expenses on their tax return. 

When is training a business expense? 

When we consider undertaking a contractor training course, we should first look at when is training tax-deductible (UK). First of all, most employers will train employees from time to time and incur employee training costs. What’s more, training courses take place in all types of industries in the UK. When an employer pays for staff training, it should help improve employee business skills, expertise, credentials as well as their overall performance. However, when is a training cost tax-deductible in business for a UK contractor?

In business, if we look at when are training courses tax-deductible (UK) for limited company contractors, the training and development must be relevant to your work and existing skill. Therefore, when we consider are courses tax-deductible and when do you receive tax relief for training courses, the course must enhance the current skills that relate to your existing line of work. Further still, the course should teach you some new skills relevant to your work.

Benefit your business

As a business owner, when you undertake work related training, it should benefit the company in the long term. As a UK contractor this should help lead to future income for your contractor limited company. You could set a training budget, and the courses you undertake should help increase your expertise. What’s more, the improved skills you attain should also assist you in performing better. This is all to the advantage of your business and its future.

Tax relief on training courses -HMRC’s specific guidelines 

Specific deductions: admin: own training courses

In this guide, we’re looking into can you claim training as a business expense and is training tax-deductible? Therefore, are professional development courses tax-deductible? In HMRC’s words, with regards to when are training costs tax-deductible:

You must incur the training cost wholly and exclusively for the trade. The business training should be for a trade you carry out at the time when you take on the training. The costs of training courses that you attend as the owner of a business (either as a limited company owner, a sole trader or in partnership with others), which will update your skills and professional expertise, are normally a business expense. In turn, you can deduct these from the profits of your business. Please see BIM35660 for further details regarding where HMRC state you can receive tax relief on professional training courses.

Therefore, we read from the above that training tax relief is available for the costs of business training courses (UK). However, this only applies when the training is `wholly and exclusively’ for business purposes. Therefore, a key factor is that the training benefits the company in the future. If it could be proved that the training wasn’t for your business activities, it will be treated as a Benefit in Kind.

Business purpose test

When you consider the question of purpose with regard to can I claim training costs against tax, please think about this. You should not take an unduly narrow view of whether the content of any course only updates the individual’s current skills. It may be clear that, for example, you acquire an entirely new skill or qualification due to the expense. In this case, it’s not likely that the training cost will be wholly and exclusively for the existing trade.

Furthermore, for general information on the business purpose of training courses, please see BIM37050.

Capital test 

It’s important to remember that expenditure on new skills may also be regarded as a capital expense, indeed this applies if you acquire an identifiable asset of sufficient substance and endurance.

Please lookup Dass v Special Commissioner and others [2006] EWHC2491 (Ch), and BIM35660.

Claim training expenses as a UK contractor or small business owner 

Preliminary thoughts

If you run your own company, there’s some flexibility here in terms of training courses for business.  When we consider can you deduct training as a business expense and can you claim professional training expenses on taxes, you need to look at the type of training and also consider the outcome. It will help if you aim to take training for business courses that improve your soft skills. This will include management and leadership skills.

In a perfect world, the training you take on should be relevant to your work. Indeed, if you work in IT this could be a contractor IT course in your particular IT skill. To sum up, if the business training course meets the above criteria, you can claim it as a business training expense. Furthermore, if you attend a number of courses and they meet the criteria, you’ll receive tax relief on training courses.

Tax relief on training courses -the types of training costs 

Let’s now consider training as a business expense and at what point are training costs tax-deductible. Indeed, the types of training courses claimable as a UK contractor could cover a wide range and may include:

  • Contractor IT training. Indeed, this could include contractor IT courses relevant to your particular skillset.
  • Project management course.
  • Business management training.
  • Management training.
  • Health and safety course.
  • Skills course.
  • Time management training.
  • Sales techniques.
  • Writing course.

You may intend to undertake a professional course in project management or business management. On the other hand, you may take another course from the list above. Further still, you may take a course not listed above, such as a professional IT training for business. When you’ve chosen your business professional training course, you could participate in one or more via a distance learning course. Indeed, you could also do this through a website or social media. What’s more, these are becoming more popular nowadays. Furthermore, many professionals today will incur online training costs when they undertake online business courses to brush up on their skills.

Training materials

Besides the cost of the training courses and considering is the training course tax-deductible, you may also incur the expense of training materials. These include textbooks or training manuals. What’s more, these may even be paper copies. However, as is common nowadays, you can usually view them online.

Besides receiving tax relief on training courses, the cost of the training materials will be tax-deductible. However, this is providing they meet HM Revenue & Customs (HMRC) tests (please later in this guide).

A University course / MBA

When we research can you claim professional training expenses on taxes, are MBA fees tax-deductible? It may be the case that you undertake a university course, Masters or MBA as part of your training. This type of business training course may enable you to learn a new skill.

In many cases however, it could be shown that these types of training are not relevant to your business’s services. For that reason, you can’t claim this as a business expense or a training expenses tax deduction. Instead, you may be able to pay for the fees through your business and treat this as capital expenditure. As a result, your business will not receive a training tax deduction.

Please see BIM35660 for the difference between revenue versus capital outlays.

Self-employed training expenses

If you’re self-employed, HMRC have guides on what you can claim for training courses. They also have a further guide on what to report if your training isn’t tax exempt. HMRC customer forums also have a page dedicated to training courses with questions from the public.

Tax relief on training courses -keeping records 

When you’re claiming training expenses on tax, it’s advisable to take note of why you think the expense is a business one. Doing this now would help because your business’s prime concerns might change over time. It may be the case that you need to justify to HMRC a specific course that you did a few years ago. Also, the business focus may change in the future. Indeed, this could be when you’re contracting or possibly when you’re no longer contracting.

Keeping notes about the training expenses will help if you receive a query from HMRC. An enquiry from HMRC could concern your claims from a few years ago therefore, it’s good to have proper records.

VAT on training courses (UK)

If you run your own business and are VAT registered, you can claim VAT on any VAT inclusive expenses. When you undertake training courses, you may be charged VAT depending on what sort of courses you take and who you take it with. Therefore, if the training suppliers charge VAT and the courses are allowable as business expenses, you can claim for the VAT on training courses.

Final thoughts

When we consider can you deduct training on your taxes, we’ve covered all of the existing rules in this guide. What’s more, we’ve taken the time to consider when do you receive HMRC tax relief on training and how do I claim professional training expenses on taxes. We’ve also looked at as a contractor, when you can claim for training through your business and when’s such training costs tax-deductible. Indeed, it’s key to note the above guidelines when you consider what you can claim in respect of business training, and when you can receive tax relief on training courses.

Professional training and courses to update your skills and knowledge are essential in any industry. Indeed, as a UK contractor, you may take on a business training course or professional courses for contractors relevant to the work you perform through your company. If you do, you can claim the professional training expenses on taxes because it will continue to help your company create more income in the future.

Finally, as with any business expenses, you should ensure that the training provider invoices the cost of the training to your business.

Link to Contractor Advice UK group on

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Published On: January 4th, 2024 / Categories: Expenses, Expenses Guides, First timer guide /

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