Claiming for Training Courses when Self-Employed

There are so many variations when it comes to different training courses and claiming them as tax-deductible expenses for your business. The HMRC are actually much tighter than you might think on the matter and so it’s imperative to know which types of course you can and can’t claim for to ensure you have no repercussions from the HMRC. In this article I’m going to give you four typical scenarios which happen to most self-employed people.

Scenario One: Relatable Course Which is an Update or Development

Let’s jump straight in here. This is the only scenario in which you can claim for a training course and is the main concept when knowing whether or not you can claim the cost of a specific course.

The rule is simple, as long as the training course is related to your industry and is an update to a previous course or a development course to improve a current skill you already have – then you can claim for this training course.

The issue that many self-employed people face is the fact that they cannot claim for the cost of learning a new skill, you can only claim for courses which are an update or development from training you’ve already gained.

For example if you were to undertake a Personal Trainer Course (Level 1) then this wouldn’t be allowed as a tax-deductible expense because the HMRC see it as learning a new skill, but all the associated update/development training courses thereafter ARE claimable (Level 2, Level 3 etc) because these are updates and development to a current skill.

Scenario Two: Unrelated Training Course

As you may have guessed, a training course which is unrelated to your industry is not a claimable expense. Simple as that! Even if you’re trying to grow your business in a new direction, if the course is unrelated to your current business purpose then you can’t claim the course.

For example, if you’re a Fitness Instructor and want to now be a Plumber, you could NOT claim the plumbing course as a taxable expense.

Scenario Three: Learning a New Skill or Trade

As mentioned in scenario one, you can only claim for courses which are an update or development to a current skill which you have been trained in. So even if you are going on a training course which is related to your industry but trains you in a new skill then you cannot claim this expense unfortunately, because the HMRC view it as a new skill which is exempt from tax-deductible expenses, they view this as Capital Expenditure.

For example let’s say you’re a website designer who now wants to learn website coding, yes this is relatable to your industry but it would teach you an entirely new skill and therefore the website coding training course wouldn’t be claimable – but any updates to that training course afterwards ARE claimable (confusing I know!).

Scenario Four: Unrelated Training Courses for the Purpose of Your Business

The final scenario is one that annoys many people! This is when you go on a training course to learn a new skill which is technically unrelated to your industry BUT is for the purpose of developing your business. Unfortunately the HMRC doesn’t care whether or not it’s for the purpose of your business, if it’s an unrelated training course and it’s a new skill then they will not let you claim it.

For example let’s say you are a Fitness Instructor who wants to learn to build a website to promote yourself, so you enroll on a website building training course to learn how to build your own website. Because learning to build websites is totally unrelated to your industry you couldn’t claim this training course I’m afraid.

So there you go, they are the four main scenarios which could arise when looking to claim for a training course expense. The key thing to always remember is you can only claim for courses which are for the purpose of updating or developing a previous skill which you have been trained in – and the subject matter MUST be related to your industry. If both of these points aren’t met by the training course you’ve taken, then you cannot claim that course unfortunately.