Q: I’m a self-employed electrician. I want to undertake some training to help me run my business, but it’s quite an expense. Is there any way I can claim back the costs of training?
A:Â There are absolutely times when, as a sole trader or self-employed individual, you will be able to count the costs of training as an allowable business expense. It does depend on the circumstances and details. In March, HMRC published updated guidance on retraining tax deductibility to help people understand this area better.
HMRC says its latest guidance “ensures that updating existing skills, maintaining pace with technological advancements, or changes in industry practices are allowable costs when calculating taxable profits.”
It‘s helpful to look at a few examples to try to understand better what is or is not allowable. In your case, let‘s say it‘s a bookkeeping course you want to do at the local college. An electrician‘s day to day work doesn‘t entail bookkeeping, of course. But as a sole trader, you need to understand accounts and how to run your business efficiently. So, a course on bookkeeping would be relevant and an allowable expense.
But if you wanted to learn a new skill to start a totally new business, that‘s where it wouldn‘t qualify. The skills training has to be relevant to your existing business.
And, when someone is learning skills in a different field, they‘re likely to not qualify. So, one example: a painter and decorator decides they want to change their business completely by going into taxi driving instead. They want to claim the costs of a taxi driving course, but as the costs will not relate to the purpose of the existing business,i.e. painting,it can‘t count as an expense.
