EIM01210 - Employment income: work-related training: general
Section 250 ITEPA 2003
The exemption in Section 250 ITEPA 2003 removes any possible tax
charge where an employer, or a third party, incurs expenditure on
work-related training for employees. It does not matter whether the
employer directly incurs the expenditure or reimburses the
employee's expenditure. The exemption covers sums that would
otherwise be taxable as earnings, as benefits, or under the
vouchers rules. The exemption from tax applies equally to office
holders.
Note: Section 250 does not give employees tax relief for
the costs of self-financed training where the cost of training is
not reimbursed by the employer. Relief for employees meeting their
own costs should be considered underEIM32525onwards.
The exemption provided by Section 250 ITEPA 2003 is much
wider than that provided by Extra- Statutory Concession A63, which
applied for 1996/97 and earlier years (see SE01350). It ensures
that no tax charge arises in connection with genuine work-related
training activities that are funded by the employer or by a third
party.
To be exempt, expenditure must be on the provision of
"work-related training" (see
EIM01220), or on "related costs" (see
EIM01240).
A payment or reimbursement of training costs is not exempt
if its purpose is to reward the employee.
Expenditure incurred by an employer for a mixed purpose,
intended in part to reward and in part for genuine training, will
need to be apportioned (see
EIM01250). But apportionment is not
necessary just because an element of genuine training is enjoyable
or recreational. For example, the use of a hotel's swimming pool
and leisure facilities during a residential course will not require
apportionment.
The main differences between the statutory exemption and the
previous concession are highlighted below:
- exemption applies to both internal and external courses
- exemption covers the costs of the employer or those of a third party providing training (see EIM01300)
- there is no territorial limitation on training location
- exemption extends to a broader range of training materials (see EIM01220)
- exemption extends to other related costs such as the cost of additional child care and the travelling and subsistence costs of the trainee (see EIM01240 and EIM01260)
- exemption extends to training which is linked to charitable and voluntary activities (see EIM01220)
- exemption from tax is mirrored in a NIC exemption.
