This guide explains your tax and National Insurance contributions (NICs) obligations if you cover the costs of training for an employee.
On this page:
You cover the costs of an employee's work-related training or costs associated with their training. 'Associated costs' include things such as books or additional travel costs incurred while the employee is training.
The same rules apply regardless of how you cover work-related training costs - eg, whether you pay the supplier directly or reimburse the costs to your employee.
You have:
You cover the cost of an employee's non-work related training. You arrange and pay for the training directly. The contract is between you and the training supplier.
For employees earning at a rate of less than £8,500 per year, you have:
For company directors or employees earning at a rate of £8,500 or more per year:
The value to use is the cost to you of providing the employee's training.
You cover the cost of an employee's non-work related training. The employee arranges the training, but you pay the supplier directly. The contract is between the employee and the supplier.
For employees earning at a rate of less £8,500 per year:
For company directors or employees earning at a rate of £8,500 or more per year:
The value to use is the amount you pay to the supplier.
You cover the cost of an employee's non-work related training. The employee arranges and pays for the training, and you reimburse the costs.
These reimbursements count as earnings, so:
The value to use is the amount you reimburse to the employee.
It's important to choose correctly between forms P11D and P9D for each employee. The form to use depends on the whether the employee is a director of your company and on whether their earnings are above or below an annual rate of £8,500. For more information - including details of what's included in the £8,500 threshold - follow the link below.
EIM01200: Further education and training costs
