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bigduckontax, Accountant
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I am a resident in the UK and I am going to study part-time

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Hi there,
I am a resident in the UK and I am going to study part-time again (EMBA) to further enhance my knowledge for my current career.
In Germany those expenses can be used to deduct from the taxable income. What could I do in the UK?
Many Thanks,
Stefanie
Submitted: 10 months ago.
Category: Tax
Customer: replied 10 months ago.
I am originally from Germany. Not a resident in Germany.
Expert:  bigduckontax replied 10 months ago.

Hello Stephanie, I am Keith, one of the experts on Just Answer, and happy to help you with your question.

Sorry, just grin an bear it as far as UK taxation is concerned. Only training to enhance existing skills can be offset against self employment income, not for new skills. Here is the Accounting Web advice on the subject:

'Deductions for the self-employed

HMRC views about training course for the self-employed is set out in Tax Bulletin 1G, which became Revenue Interpretation (RI) 1. It says: "Where attendance at a course is intended to give business proprietors new expertise, knowledge or skills which they lack, it brings into existence an intangible asset which is of enduring benefit to the business. We take the view that the expenditure is therefore of a capital nature, and deduction is prohibited by ICTA88/S74 (f) (now s.33 ITTOIA 2005).

"On the other hand, where attendance is merely to update expertise etc. which proprietors already possess, the expenditure is normally regarded as revenue expenditure and will be deductible if it satisfies the `wholly and exclusively for the purposes of the trade' test in ICTA88/S74 (a) (now s.34 ITTOIA 2005).'

I am so sorry to have to rain on your parade.

Customer: replied 10 months ago.
Hello Keith,Thank you. I am not self-employed. I work full-time in the UK but the studies will be besides working.Would this change your answer?Many Thanks, Stefanie
Expert:  bigduckontax replied 10 months ago.

Well not actually, unless your employer is paying for the training, not you. Ross Martin explains it thus:

'This can be a confusing topic: if an employer provides work related training it is specifically allowed for tax. If an employee orchestrates their own training there is perceived to be a benefit and no deduction is allowed.

Work-related training:

  • When an employer pays for work-related training, or reimburses an employee when he incurs work-related training costs, there is no benefit to the employee and it is not subject to tax.
  • An employee is generally unable to claim work-related training costs as deduction for tax if the employer does not reimburse his costs.
  • Recent case law indicates that training costs will be deductible in the employee's hands if training is part and parcel of the employee's job specification, as is evidenced by some Registrar training posts within the NHS.
  • When employer does not reimburse an employees costs, it might consider doing so as part of a salary sacrifice arrangement.
  • The term "work-related" is defined very widely, it can include anything from a first aid course to a motivational team building activity course.'

I am so sorry not o be able to come up with a more helpful answer Stepfanie, but tax law and practice in this matter is against you.

Please be so kind as to rate me before you leave the Just Answer site.

Customer: replied 10 months ago.
Hi there,I am still unsure. You are speaking about training but this is not training but a new degree. A Master of Business Administration.In Germany it is fully tax deductable and I would be surprised if this is not the case at all in the UK.I cannot open the link that you shared with me as it is only for paying subscribers.
Expert:  bigduckontax replied 10 months ago.

In the UK it is most certainly not tax deductible and never has been although you may be able to obtain a higher education grant to offset your expenses from your local authority or other sources.

I never gave you a link, merely a quotation, but if you want to read the Ross Martin opinion you can find it here:

http://www.rossmartin.co.uk/employers/employee-expenses/265-training-and-course-fees-employeremployee

As far as UK tax concessions are concerned it is a non starter.

bigduckontax and other Tax Specialists are ready to help you
Customer: replied 10 months ago.
Hi there,I just spoke also with the UK tax team. I am really surprised to hear that in the UK tuition fees and expenses for education cannot be used to lower the tax deductable income!I am looking for a good accountant who can help me maximising tax benefits now considering this system.Thank you, Stefanie
Expert:  bigduckontax replied 10 months ago.

Thank you for your excellent support.

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