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HMRC internal manual

Business Income Manual

Specific deductions: trade organisations: industrial training boards

Industrial training boards established under the Industrial Training Act 1982 are responsible for seeing that the quantity and quality of training are adequate to meet the needs of the industries for which they are established. Each industrial training board is required to impose a periodic levy on employers and also has the power to make grants to those whose training courses are approved by the board. In many industries, non-statutory training organisations have been set up and are financed by contributions from employers etc in the appropriate industry.

Where the employer carries on a trade, the levies or contributions should be treated as admissible trade expenses, while the grants (for example, in respect of apprentices’ wages and instructors’ salaries) should normally be treated as trading receipts. Where, however, a grant is earmarked for a particular item of capital expenditure, for example, to help to build a factory extension for use in training apprentices, it is not a trading receipt. If the expenditure qualifies for capital allowances, the grant should be deducted from the qualifying expenditure (see CA14100).

The Construction Industry Training Board (CITB) is responsible for promoting vocational training in the construction industry. It imposes levies (which are allowable deductions) on employers and contractors in the industry to fund its operations. These include making grants to employers and contractors whose training courses are approved by the CITB. Many contractors who pay levies to the CITB recover the cost from payments to their subcontractors. The procedure is explained at CISR15110.