TQOTW: Training Costs

My client is a surgeon who is currently employed by the NHS. During the year, he has attended various training courses to enable him to keep up to date with changes in the profession and gain new qualifications to further his career. Can he deduct the cost of attending these courses from his employment income?

The legislation does provide for relief for the costs of work-related training under s250 ITEPA 03 but this will not apply to your client because relief is conditional on the costs being incurred or reimbursed by the employer.

Outside of this rule, to obtain relief for training costs paid for personally we need to look at the terms of s336 ITEPA 03 which requires that the employee is obliged to incur the expense as the holder of the employment and that the expense was incurred “wholly, exclusively and necessarily in the performance of the duties of the employment”.

It is HMRC’s view that training expenses incurred personally by an employee are not deductible under s336 ITEPA 03 even if the subject is relevant to the nature of the employment. This is based on the opinion that they are not incurred “in the performance of the duties of the employment” i.e. a surgeon’s job is to treat patients, not to attend training courses.

However, the case of R & C Commrs V Banerjee [2010] BTC 662 identified an exception to this long-standing view. The Court of Appeal accepted that a deduction for training costs incurred by an employee should be relievable under s336 ITEPA 03 where the employee was employed on a training contract and undertaking training was an intrinsic contractual duty of the employment.

Therefore HMRC may allow relief under s336 ITEPA 03 if the employee is employed under a training contract the terms of which meet the following criteria (as provided in EIM32535):

  • Training in an intrinsic part of the contractual duties
  • All other duties are being undertaken as part of the training
  • There is a mandatory requirement for the employee to undertake the external training as an intrinsic part of the duties of employment
  • Failure to complete the training and obtain the qualification will mean that the employee will not be able to continue in employment with the employer in the role that would otherwise have been available to them after qualification

Additionally, HMRC has identified a number of training courses specific to the medical profession where relief for training costs incurred will qualify for relief as, according to HMRC, they meet the above conditions. A list of these can be found in their Employment Income Manual at EIM32540. As your client works within the medical profession then if the courses he attended appear on this list then he can claim relief for the costs incurred.


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Tax Adviser
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Previously Laura has worked in the tax departments of accountancy practices, advising individuals and owner managed companies. She has experience in most aspects of tax, specialising in income tax, capital gains tax and corporation tax. Laura is a member of the Association of Taxation Technicians and the Chartered Institute of Taxation.

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