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HMRC internal manual

VAT Input Tax

HM Revenue & Customs
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Specific issues: retraining prior to redundancy

Some companies provide employees with advice or training opportunities before they are made redundant. This is done to help the employee make a fresh start after they lose their job. Outside consultants often provide the advice or training.

VAT on providing the advice or training is incurred for the purposes of the employer’s business. Therefore it is input tax. It is not our policy to apply the Supply of Services Order when this happens.

In principle there might be an output tax charge because of private use by the employee. However, because such private use is incidental to the business use, no such charge will arise.