Training Costs – are you missing the point?

It can be more tax efficient for an employer to pay for training than employees paying themselves. 

Where an employer provides one of their employees with work related training, the cost of providing the training is tax deductible for the employer.  In addition to that, the cost of the training isn’t taxable upon the employee.  By structuring payments this way the employee can save money and the employer can obtain a tax deduction for the costs, as well has having a more skilled workforce.

Could you make your employee's training part of their salary package?

Many employers, including the NHS still don’t make full use of this tax exemption and their workers may have to pay for training cost, trying to claim a personal tax deduction themselves.  Unfortunately the rules for employees are much stricter and more often than not they cannot claim the training costs against their employment income for tax purposes.  It can often make sense to include training costs as part of a salary negotiation and employment package. For more information on what needs to be done please contact us to find out more.

Extract taken from our 2011 Winter edition Tax newsletter – if you would like to subscribe please leave your details here.

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