MBA Courses and Salary Sacrifice

MBA Courses and Salary Sacrifice

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Hello,

I tried to call the tax office about this but all they did were put me through to one people to another on the ph...

One of my client wants to sacrifice his salary towards paying for his MBA course. I do understand how the salary sacrifice works for an employee but I am confused about a few things:

1. Assuming he is only an employee earning £25k pa and wants to undertake an mba course costing say £20k over 2 years. Can he sacrifice the whole salary or part of it as well. How does this works? I understand that by sacrificing his salary the money that should have gone towards paye and ni is now being used to pay the mba. What are the implications for the company? I presume the company will pay the £25k and the employee will simply pay off the company the amount owed.

2. Now what if the employee is also the director of the company. My understanding of this is that he should take the minimum salary of say £5k. The company will pay for the course. He can take money out via interim div. But would the mba cost be a deductible expense in the accounts.

Thanks
Amit Rai

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By AnonymousUser
30th Aug 2008 09:47

Do a search
of Any Answers. A similar topic cropped up not so long ago about salary sacrifice and accountancy studies.

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By User deleted
29th Aug 2008 15:15

Work related training
One element of these issues relates to the tax rules on work related training. The following is a link to a short summary of these rules that may be a starting point.
http://www.chiene.co.uk/pdf/employbenefit.pdf
There has been a tax case supporting the use of these rules for a MBA.

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