Tax efficient training costs

Tax efficient training costs

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Employee currently paying for MBA course which will enhance skills for his current employment and has been told that he can get tax benefit if the employer pay the training provider direct and the employee immediately reimburses the employer. Is this correct? is there any other way to get tax relief for training costs?
SteveB

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By AnonymousUser
14th Jun 2002 11:38

Tax and sense
The problem arises because the costs of training are not an allowable expense. Therefore, if the individual pays the costs there is no tax relief. However, if the employer bears the cost and the relevant conditions are fulfilled, the employer obtains tax relief and there is no benefit in kind. That, to my mind, is the dubious practice and not the shenanigans that go on in the frozen north.

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By neileg
14th Jun 2002 09:06

Salary sacrifice
This is usually done by reducing the employee's gross salary by the cost of the training. By paying for it from gross salary the employee saves tax and NI and the employer the NI.

I've always felt that this was a dubious practice, despite it being widely used, including by me!

Perhaps my learned colleagues will have more to say on the current state of play.

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