skip to navigationskip to main content

Tax Clarity for Self-Employed Training Costs

The Spring Budget included many updates, including details about how to treat training costs for self-employed individuals.

Removing potential confusion is helpful for the 4.39 million self-employed people in the UK. The latest HMRC guidance states training costs are tax deductible when they are:

  1. ‘wholly and exclusively’ for the existing business, and
  2. not for the purchase of an asset (capital expenditure).

When can you deduct training costs?

There is a clear distinction between individuals already trading and those setting up their self-employed businesses. Training expenses cannot be claimed if the training helps to

  • start a new business, or
  • change occupation,
  • expand into new areas of business that are not directly related to current trading.

What self-employed training costs are deductible?

As a self-employed person, you can claim training costs that relate to your current business and:

  • improve skills and knowledge you currently use for your business.
  • keep you up to date with technology used in your industry.
  • develop new skills and knowledge related to changes in your industry.
  • learn new skills and knowledge to support your business including administrative skills.

New clarity …

The updated HMRC guidelines offer clarity about the following training expenditure examples:

  • Where training updates or provides expertise or knowledge in the individual’s existing business area the costs will normally be revenue in nature.
  • The costs of acquiring new skills or knowledge to keep pace with advancements in technology and changes in industry practices will usually be allowable, provided they relate to the taxpayer’s existing business.
  • If training is ancillary to the main trade, such as introductory bookkeeping or digital skills, the costs may also be revenue depending on the specific circumstances.

… with continued disparity.

It’s important to note that allowable training costs differ between self-employed individuals and employees. It remains easier for employers to claim tax relief for the cost of training employees, even in new skills.

If you are self-employed, or considering setting up in business, talk to the friendly experts at Hargreaves Owen. Enjoy an initial, jargon-free discussion without obligation. Discover which of your costs can be allocated to your business, keeping you compliant and tax efficient.

Our Promises

What Our Clients Say

Meet The Partners


Sign up for our newsletter