The government is consulting until 8 June 2018 on extending the tax relief available for self-funded training by employees and the self-employed.
Following the call for evidence on employee expenses in 2017, the government announced at Autumn Budget 2017 its intention to consult on work-related training costs. The primary objective is to enable individuals to:
upskill or retrain, particularly those who want or need to change career; and
undertake training with approved providers leading to qualifications.
Employees cannot currently receive tax relief other than in limited circumstances when the training is a contractual duty of their existing employment. The self-employed can deduct the costs of training incurred ‘wholly and exclusively’ for their business where it maintains or updates existing skills but not when it introduces new skills. Options being considered include:
retraining for a new employment or trade: allowing self-funded training expenditure to be carried forward and set against the profits or earnings of the new trade or employment within a reasonable timeframe;
self-employed upskilling for an existing trade: allowing a deduction for such expenditure subject to the general condition that it is wholly and exclusively for the purposes of the trade; and
employees upskilling for an existing employment: the government recognises there is a case for ensuring tax relief is available for maintaining and improving existing skills.
The government is consulting until 8 June 2018 on extending the tax relief available for self-funded training by employees and the self-employed.
Following the call for evidence on employee expenses in 2017, the government announced at Autumn Budget 2017 its intention to consult on work-related training costs. The primary objective is to enable individuals to:
upskill or retrain, particularly those who want or need to change career; and
undertake training with approved providers leading to qualifications.
Employees cannot currently receive tax relief other than in limited circumstances when the training is a contractual duty of their existing employment. The self-employed can deduct the costs of training incurred ‘wholly and exclusively’ for their business where it maintains or updates existing skills but not when it introduces new skills. Options being considered include:
retraining for a new employment or trade: allowing self-funded training expenditure to be carried forward and set against the profits or earnings of the new trade or employment within a reasonable timeframe;
self-employed upskilling for an existing trade: allowing a deduction for such expenditure subject to the general condition that it is wholly and exclusively for the purposes of the trade; and
employees upskilling for an existing employment: the government recognises there is a case for ensuring tax relief is available for maintaining and improving existing skills.
