Tax relief on training costs

The issue of tax relief on training expenditure incurred by individuals arises particularly in the case of airline pilots, when the training costs are not insignificant. Training costs may also arise with many other forms of employment. 
Training costs are generally met by the employer.

Exemption from tax for the employee is provided by s250 ITEPA 2003, which covers the cost of work-related training and incidental costs, whether the employer incurs the expenditure directly or reimburses the employee’s expenditure. To qualify for relief under s250, the training must be on the provision of “work-related training” or “related costs”.

What is work-related training?

Work-related training includes “any training course or other activity” designed to provide, improve or reinforce any knowledge, skills, or personal qualities that are, or are likely to be, useful to the employee when performing their duties or to participate in charitable or voluntary activities arising through the employment.

Courses providing updates such as continuing professional development are (thankfully!) clearly allowed on the basis that they provide the up-to-date knowledge needed on a day-to-day basis. However, training does not have to be directly linked to the work that the employee usually carries out. Training in order to become the office first aider, team-building, and employee development schemes will also qualify for relief.

How must training be delivered?

There is no restriction on the way the training can be delivered so self-tuition packages, computer-based training, and distance learning all qualify, as well as more formal classroom-based training. It does not matter whether training is delivered internally or externally, or on a part-time or full-time basis, and there is no territorial limitation on training location.