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Cash in on Work Related Training 

Good news, employers may pay for a variety of training costs without triggering any tax liability for the employee(s) in question. In fact, the concept of "work-related training" is drawn so widely these days that it can encompass almost any activity that is not purely recreational.

HMRC is offering generous tax benefits against work-related training, whereby the employee receives work-related training tax free. The exemption covers sums that previously might have been taxable as earnings, as benefits, or under the vouchers rules. The exemption from tax applies equally to employees and office holders, and the location of the course is not relevant, it can be office-based or not; it can take place in the UK or abroad.

Remember, training must be directly related to the individual’s work: in statutory terms this means tha work-related training tax-exemption can cover:

"Any activity designed to impart, instil, improve or reinforce any knowledge, skills or personal qualities which ... are likely to prove useful to the employee when performing the duties of the employment or a related employment." 

The relief then extends to those skills that will qualify (or better qualify) the employee to perform those duties or a range of associated charitable or voluntary activities. Specifically, HMRC acknowledges that:

"Self tuition packages, computer-based training, distance learning, work experience or work placement and informal teach-ins are all acceptable, as are more formal classroom-based methods. It does not matter whether training is delivered internally or externally, or on a part-time or full-time basis." 

The costs of training are even reimbursable! For example, even if the invoice is in the name of an employee or office holder, he or she can be reimbursed by the company and the costs remain non-taxable. Travel and subsistence costs are also included if directly associated with the training.

Contact DNS today if you are unsure, and discuss whether your planned training courses are within the remit, but here are a couple of examples to consider when choosing a course:

NOT ALLOWABLE

A London-based IT consultant has a few French-speaking clients and believes that a course of evening classes in French will enable him to communicate more effectively and do a better job. Although this might be true, the IT consultant does not need French in order to carry out his actual job as an IT consultant, therefore, the expense of the course is taxable.

ALLOWABLE

However, our same IT consultant wants to attend a course at Reading University to expand his programming skills; programming is directly related to his actual employment and job description and, therefore, the course is eligible under work-related training. His travel from London to Reading, accommodation and subsistence are also allowable.

But, Wow! What a generous benefit the government is offering, so if you are looking to improve your skills with some work-related training make sure you do it through your company and keep on saving on your taxes.

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