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Self-funded work-related training – Spring Statement 2018

The government has launched a consultation on plans to extend the existing tax relief available for self-funded work-related training by employees and the self-employed, as part of the government’s focus on creating an environment for individuals to develop their skills to boost productivity in the UK.

Most employers fund the work-related training of their employees, although sometimes the employee might pay for the training themselves and subsequently have the costs reimbursed. The current rules mean employers can deduct these costs for tax purposes. Employees are not taxed on the benefit when their employer pays for, or reimburses them for, the cost of work-related training and certain associated costs. Tax relief is also available in certain circumstances when an employer funds retraining to help an employee find another job with a new employer or set up as self-employed.  However, some employees pay for work-related training and this is not reimbursed by their employer. Employees cannot currently receive tax relief other than in limited circumstances when the training is an intrinsic 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. This consultation will look at possibilities of making the rules fairer for everyone regardless of employment status.

The consultation will run until 8 June 2018.

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