The tax treatment of expenditure on training varies greatly depending on the situation in which the expense is incurred...

• For sole traders and partners the expenditure must be wholly and exclusively for the purposes of the business and not for personal reasons. So happening to attend a training course in a location whilst on holiday does not make it tax deductible, although there may be some negotiation to be had with some tax inspectors over apportioning some of the cost.
  
  
• In addition, training that is of a capital nature and provides the proprietor with new skills is not allowable, whilst training that updates existing knowledge and expertise is revenue in nature and would be allowable. For example, the cost of a trainee driving instructor paying to train to be an approved driving instructor is putting him in a position to trade and so is capital and not allowable whilst refresher courses would be allowable. Of course, there are likely to be many grey areas. For example, is a course for a software programmer who knows nothing of graphic design, a new skill or an updating of his computer skills? There are many situations where arguing and presenting your case in the right way will significantly increase your chances.
  
  
• For employees, the position is more difficult, especially if they incur the cost themselves as rarely will the cost be tax deductible for them. However, if the employer incurs the cost either directly or by reimbursing the employee, any work related training will be tax deductible for the employer and will not be taxable as a benefit on the employee. If necessary a salary sacrifice scheme could be put in place to help the employee effectively get tax relief by restructuring the pay package to reduce the employee gross salary but the employer pay for the training instead.

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