Tax relief for self funded training

ICAEWREP 30/18 Tax relief for training was submitted to HM Treasury in January 2018 following an invitation to participate in an informal round table discussion on tax relief for self funded training in the UK.

We welcome both the current initiative to introduce a tax deduction for self funded training and the fact that HMT and HMRC are seeking views at such an early stage in the policymaking cycle.

We suggest that consideration be given to:

  • extending the current tax deduction available for employers who train their employees (s250 ITEPA 2003) to unreimbursed costs of training incurred by employees themselves
  • including training costs as an optional remuneration arrangements exemption (s228A ITEPA) so that employees who sacrifice salary to fund training costs paid by employers are not taxed on the higher of the cost of the training and the amount sacrificed
  • simplifying the current position on self-employment and training
  • introducing tax relief on training expenditure to develop new skills for the employed and self-employed.

Whatever direction the government takes with this, we recommend as an overriding point that any new rules need to be clear and consistent.