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HMRC internal manual

Employment Income Manual

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HM Revenue & Customs
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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 under EIM32525 onwards.

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.