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HMRC internal manual

Business Income Manual

Specific deductions: staffing costs: employees seconded to educational establishments

S70, S71 Income Tax (Trading and Other Income) Act 2005, S70, S71 Corporation Tax Act 2009

Where an employer makes available the services of an employee to an ‘educational establishment’ on a temporary basis, the expenditure on the remuneration etc of the employee may still qualify as an allowable trading expense.

The expenditure is allowable for secondments that are ‘expressed and intended to be temporary’. There is no definition of ‘temporary’ but in practice a secondment for three years or less should be accepted as ‘temporary’ without further enquiry.

A deduction is allowable in respect of expenditure that is attributable to the employment, so that not only the employee’s remuneration but also any pension contributions and employer’s NIC are deductible, if they continue to be met by the employer during the period of secondment.

The following are ‘educational establishments’:

  • In England and Wales, any local education authority and any educational institution maintained by that authority, any independent school, alternative provision academy, any institution within the further or higher education sectors and a 16-19 academy.
  • In Scotland, any local education authority, any educational institution maintained by such an authority, any public or grant-aided school or independent school, any central institution and any institution within the higher education sector or college of further education.
  • In Northern Ireland, any education or library board, college of education, grant-aided or independent school or any institution of further education.
  • Any other educational body approved for the purpose by the Secretary of State or, in Northern Ireland, the Department of Education.