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Offsetting training against tax

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Hi all,

I'm looking at the training to become a qualified electrician (I have 10+ years in construction but in an adjacent field), with an aim of becoming self-employed / starting a business in a few years time. Considering I already have some experience and a few of the qualifications needed, I have worked out it should cost me approx. £4k to train.

I currently work full time for a company PAYE, I would be doing this training in my own time (evenings / weekends) and building my portfolio for the NvQ Lvl 3 also in my own time (evenings / weekends) by working with electricians I know.

My question is, can I write all 4k off against tax, even though the training is not technically fully related to my current employment?

I've looked at the advice on the HMRC website:

training courses offering completely new knowledge that aren’t for the benefit of the business don’t qualify for tax relief. So, for example, if an electrician went on a training course to update his or her knowledge on new legislation regarding electrical work, tax relief would be deemed allowable.

If, however, an electrician decided to train as a plumber to do work on his or her own home, this wouldn’t be deemed allowable for tax relief because it is to acquire a new skill that isn’t wholly for the benefit of the business. It could be entirely possible (say in the case of a dentist or doctor) that part of a course could be deemed allowable and part not, depending on the course content.

Training tax relief for the self-employed and sole traders

For the self-employed, HMRC will look at the existing trade. Provided the training undertaken is to update professional skills and expertise relating to the business, then this expenditure is normally tax deductible. Expenses should be reported when filing your self-assessment tax return.

Training for a new trade as a sole trader is likely to be classified as capital expenditure because the training is providing new expertise, knowledge and skills. Where the training is merely to update expertise already possessed this is a revenue expense, and can be deducted for tax purposes.


The only issue I can see here is that my "existing trade" is strictly speaking, not electical, although it is "construction" in the broader sense. I am thinking this would be enough to just do a self assessment return, including my PAYE earnings, and claim the tax back on the training, but would welcome any thoughts or experiences with writing off training against tax?

Or would it make more sense to set myself up as a limited company before I do the training, in which case the training is definitely "for the benefit of the business"?

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The principle is whether it is capital or revenue.

Acquiring a new skill is regarded as a capital asset and not allowable as a taxable deduction. There are no capital allowances for intangible assets such as skill and knowledge, or the cost of training to acquire them.

If you were refreshing an existing skill used in your trade or profession  then it is an allowable revenue expense.

The same principle applies to a limited company, but there is more flexibility. This article covers it. https://www.itcontracting.com/claiming-training-costs-via-your-limited-company/

The second post covers losses incurred in the opening years of a business. Any losses incurred in the first three years of a new business can be offset against tax paid in the previous three years. Starting with the earliest year first.

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