Last updated: 16 October 2026
Are training costs tax deductible?
Often, yes. HMRC updated its guidance on training costs for self-employed people in 2023 because many found the old rules unclear. Training is now usually allowable if it maintains or updates skills you already use in your business, including learning about new technology, methods or regulations. Training that gives you skills for a completely new trade is still not allowable.
What HMRC allows for sole traders
| Type of training | Allowable? |
| Updating existing skills, such as a hairdresser learning new colouring techniques | Yes |
| Keeping up with new technology, such as software used in the business | Yes |
| Training that also lets you offer related new services in the same field | Usually yes |
| Training to start a different, unrelated trade | No |
| Training that leads to a qualification for a new profession | Usually no |
Courses on general business skills, such as bookkeeping or marketing, are generally allowed because they relate to running your existing business.
Training for employees and directors
Companies can normally deduct the cost of training employees and directors if it is for the business. The employee is not taxed on work-related training their employer pays for, and no National Insurance is due. This includes the course fee, exam costs, study materials and related travel and subsistence.
Examples
- A self-employed electrician pays £600 for a course on installing EV chargers. This updates his existing skills and is allowable, even though it lets him offer a new service.
- A freelance graphic designer pays for a UX design course. This builds on her design trade and is likely to be allowable.
- An employed nurse who leaves to retrain as a self-employed physiotherapist cannot deduct the physiotherapy degree, as it is for a new trade.
Related costs
Travel to the course, accommodation if you stay away and the cost of course materials follow the training: if the training is allowable, these costs usually are too. Keep receipts and course details.
VAT
If you are VAT registered, you can usually reclaim VAT on training for your business. Many training providers are exempt from VAT, so there may be none to reclaim.
What saves the most tax?
For a sole trader paying 20% income tax and 6% Class 4 National Insurance in 2026/27, a £1,000 course costs £740 after tax relief. For a higher rate taxpayer it costs £580. For a company, the saving is 19% to 25% corporation tax.
Records to keep
Keep the invoice, a description of the course and a note of how it relates to your business. If HMRC queries the cost, showing the link to your existing work is key.
Training paid for by your company
If you run a limited company, it is usually better for the company to pay for your training directly. The company gets corporation tax relief and you are not taxed on the benefit, provided the training is work-related.
Frequently asked questions
Can I claim online courses and subscriptions?
Yes, if they relate to your existing business.
Can I claim the cost of a degree?
Only if it updates existing skills; a degree for a new career is not allowable.
Are conferences allowable?
Yes, if attended mainly for business.
Can I claim training before I start trading?
It may count as pre-trading expenditure if it would have been allowable once trading.
Related: training costs for a new limited company, what business expenses can I claim and professional fees.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with allowable business expenses. See our sole trader accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 16 October 2026. It is not personal advice, so speak to an accountant about your own situation.
