Sponsoring employee educational qualifications
Discussion
Many years ago (around 1989) my employer at the time was good enough to support me doing my first degree by paying 80% of my course fees and 25% of my books, plus summer school fees.
I want to offer someone the same chance and I am considering doing that for one of my employees but can't see how I can do it without it being seen as a benefit in kind for him by HMRC. The course isn't directly job related but could loosely be said to be useful (he wants to do an MSc in creative writing which we could use as part of our web site design, marketing or manual/report writing). The course fees are about £4000.
Anybody know the position and whether HMRC will argue that since it isn't directly job related it isn't an allowable expense for the company?
They probably will argue that.
The basic principle of allowing business expenses for tax purposes is that the expense has to have been incurred "wholly and exclusively for the purpose of the trade". I doubt if you can argue that a course which has no relevance to your trading activity is an allowable expense.
The best route would be to try and esablish some link between the contents of the course and how it might benefit your business - e.g. improving the employee's management, leadership or communication skills etc etc.
Normally, paying for somebody's education would also result in a Benefit in Kind charge on the employee. However, I am pretty sure that a relevant business related course which has direct benefits for your business might escape such a charge. For example, I doubt that employer subsidised apprenticeshuips or "aricled clerk" style training would ever result in a BIK charge.
The basic principle of allowing business expenses for tax purposes is that the expense has to have been incurred "wholly and exclusively for the purpose of the trade". I doubt if you can argue that a course which has no relevance to your trading activity is an allowable expense.
The best route would be to try and esablish some link between the contents of the course and how it might benefit your business - e.g. improving the employee's management, leadership or communication skills etc etc.
Normally, paying for somebody's education would also result in a Benefit in Kind charge on the employee. However, I am pretty sure that a relevant business related course which has direct benefits for your business might escape such a charge. For example, I doubt that employer subsidised apprenticeshuips or "aricled clerk" style training would ever result in a BIK charge.
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