HM Treasury has published ‘Taxation of self-funded work-related training: summary of responses’ and has decided not to extend the tax relief available.

The original consultation, ‘Taxation of self-funded work-related training: Consultation on the extension of tax relief for training by employees and the self-employed’, looked at extending tax relief for Employee training and the Self-employed to support those wanting to upskill or retrain.

Responses to the consultation were mixed and the government concluded that there is insufficient evidence that extending relief will incentivise self-funded work-related training.

Respondents suggested that the main barriers to the proposals were:

  • The upfront cost of the training
  • Lack of time due to other commitments
  • Low-paid individuals are unlikely co claim.
  • Those who benefit most from tax reliefs are the higher rate taxpayers and there is no benefit for non-taxpayers.

The proposals included allowing relief where the trainee plans to use the training for a future employment or trade and a possible carry forward mechanism, whereby, the costs are carried forward until the new employment or trade begins:

  • Respondents suggested that giving relief based on an individual’s intention is open to potential misuse.
  • The carry forward proposals would be too complicated and individuals are unlikely to be motivated by tax relief which will only be given sometime in the future and only if the business is successful.

Instead of extending reliefs, the government will launch a National Retraining Scheme, which will include careers guidance and state-of-the-art courses.


Training and course fees

Training and course fees (self-employed)

Budget 2018: Summary for SMEs

External links:

Taxation of self-funded work-related training: summary of responses