Can I claim for training and development expenses in my business?

Published by Tamsyn Jefferson on 17th August 2020

Sole Traders

Good news! HMRC updated their legislation in March 2024 to provide clearer, and more up-to-date guidance around training for sole traders. Training for sole traders is allowable when it improves skills and knowledge you currently use for your business (for many professions this is known as CPD), but it has now been extended to include:

keeping up-to-date with technology used in your industry
developing new skills and knowledge related to changes in your industry
developing new skills and knowledge to support your business – this includes administrative skills, but includes any skills that are ancillary to your existing trade

You cannot claim training expenses to start a new business, or a new area of business that does not directly relate to your existing business.

Below are some examples of allowable training expenses that HMRC provide on their website:

A wedding photographer wants to improve their photo editing skills, so they attend an online refresher course on using photo editing software
A plumber runs their own business. They sign up to a beginners bookkeeping course at their local college. Whilst this doesn’t improve their plumbing skills, it enables them to run their business better
A person sells handmade pottery online. They want to sell online. They sign up to an e-commerce course and then go on to complete a course on website development
A personal trainer attends a course to improve their understanding of nutrition and gains a basic qualification in nutrition. Along with clients expecting personal trainers to have a basic understanding of nutrition, this will help them provide their clients with a better training plan (the course would not be allowable if they wanted to become a nutritionist as this is a separate line of work)
An author writes children’s books and sells them. They go on an illustration course to enable them to do their own drawings, and save money on hiring an illustrator.

Examples that are not allowable:

An unemployed person pays for a course to enable them to become a driving instructor. As this is for a new business, it is not allowed
A shop owner runs a sportswear shop. They enrol on a sports science degree as they are interested in it and they think it will help them understand their customers better. The costs associated with the degree course would not be allowable as the knowledge acquired will not help them sell sportswear.
A freelance makeup artist wants to move into tattooing and enrols on a course. This would not be allowable as it would be for the purpose of setting up a new business

Limited Companies

Training is a tax-deductible expense if it is wholly and exclusively for the business. The rules are similar to those for sole traders: if you are improving the skills and/or knowledge you already apply in your work, this is allowable for Corporation Tax purposes. Courses must be work-related (ie related to their position). If you are paying for training for your employees, you also need to identify whether there is an employee benefit to declare. You can find out the requirements on the HMRC website here. However, courses to acquire new skills or knowledge to keep pace with advancements in technology and changes in industry practices, related to the business area, will usually be allowable. Ancillary skills and and knowledge to the employers trade are also allowable.

HMRC states that work-related training is defined as “any training course or other activity which is designed to impart, instil, improve or reinforce any knowledge, skills, or personal qualities which:

are, or are likely to prove, useful to the employee when performing hir/her duties or
will qualify for better qualify the employee to undertake the employment, or to participate in charitable or voluntary activities arising through the employment.” (HMRC – gov.uk – EIM01000)