How Do You Claim Training and Development Expenses?

Learning is a continuous process, and you learn along the way as you work in your professional field, meet new people, and work on new projects. You always learn something new. However, with time, patterns of doing certain things change, and then you have to upgrade yourself to stay well-equipped with all the necessary skills needed. This comes under the tag of training and development. If you are self-employed, looking for training, or working in a company and training is given to you officially, you might worry about the fee charges and then the tax return at the end of the year. This article gives you insight on how to manage tax returns and claim training and development expenses while living in the United Kingdom.

 

How to Claim Training and Development Expenses in the UK?

Training and development is a process of upgrading yourself in your work field to stay updated about recent advancements in your work environment and new working techniques that are introduced. If you are self-employed or working for a company, training and development are essential for your career growth and personal grooming. These give you exposure to new horizons, allow you to meet new people, and enable you to collaborate, coordinate, and manage tasks in a limited time.

What are the Types of Training and Development?

There are two types of training and development programs

1- Employee training and development

In this type, the employees of the company are trained in their educational and skill areas so that they perform better with fewer errors and mistakes. The training and development programs help in employee retention because they give them a sense of satisfaction and growth in career and personal grooming.

2- Management training and development

For professional growth, employee management training and development is crucial. For being promoted to a higher post, the management should be well-trained and well-equipped with new work techniques and management strategies.

What are the Benefits of Training and Development?

The benefits of training and development are:

1- Improved efficiency

Training and development programs provide opportunities for employees to show their efficiency in handling multiple tasks in a short period of time.

2- Increased engagement

When employees are rightfully equipped with new technologies and working techniques, they work faster and better. They enjoy being engaged in new complex tasks.

3- Higher productivity

The professional, well-trained staff will perform better in every hard situation, which will ensure high productivity of the company. Moreover, it will create a positive environment in the company where all the employees know how to work without disturbing others.

Claim Training and Development Expenses

While living in the UK, every citizen is responsible for filing a tax return against every activity involving money. The same is the case with training and development sessions. In this, the individual or company can claim training and development expenses according to HMRC-set rules.

In the UK, you can claim training and development expenses if the following conditions are fulfilled:

• If the training and development program improves the skills and qualifications you already have for your business
• To help you get handy on new technological advancements in your industry
• Helps you learn new methods and develop new skills that are high in demand in your industry
• If the training and development programs help you develop new skills that will grow your business or bring advancement in the industry you are working.

There are certain limits where you cannot claim training and development expenses. You cannot claim your expenses of training and development if

• You are starting a new business
• Expand your business to horizons that are not directly related to what you are currently doing

What to Report and Pay to HMRC?

If the training expenses are not exempted from standard tax, you can report it to HMRC and pay the due tax amount. You are supposed to report on who is arranging and bearing the expenses of the training and development program.

If you arrange and pay:

• If you are the one arranging and bearing the expenses of the training and development program, then you must
• Report on the expense on form p11D
• Pay Class 1A national insurance on the expenses of the training and development program
• If you pay for the training arranged by the employee:
• If you are paying for the training and development program arranged by your employees, then you must
• Report the charges on form p11D
• Pay class 1 national insurance on the expenses of the training and development program.

 

The Bottom Line

The training and development programs play a crucial part in the business growth and personal grooming of your staff and as an individual. You can claim the training and development expenses while filing your tax return at the end of the financial year. The criteria are different if you are arranging and bearing the expense of the training and development program and if your staff is arranging the training and development program.

Disclaimer: All the information provided in this article on claim training and development expenses, including all the texts and graphics, is general in nature. It does not intend to disregard any of the professional advice.