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HMRC internal manual

Employment Income Manual

Employment income: retraining expenses paid by employer: exemption from tax

Section 311 ITEPA 2003

Certain employees, and former employees, are exempt from any charge to tax in respect of costs met by their employer, or former employer, for training courses enabling them to acquire skills or knowledge which might help them to obtain further employment, or to become self-employed. Exemption is provided by Section 311 ITEPA 2003, and the guidance beginning at EIM05010 below explains how the exemption works. Certain conditions requiring the employee to have worked full time and embark on a full time course were relaxed with effect from 6 April 2005. The condition restricting the length of the course to one year was extended to two years from the same date.

Note that Section 311 acts solely as an exemption from charge. It does not enable employees to obtain a deduction for retraining expenses that they incur, and which are not reimbursed by their employer.

As regards expenses relating to further education courses or training related to the employee’s current employment, see EIM01200 onwards.