Check if the cost of training could be an allowable business expense
Find out if you could claim the cost of training as an allowable business expense if you are a self-employed individual.
Before reading this guidance, you should read information about expenses if you’re self-employed.
The first list of examples includes the types of scenarios where the cost of training is likely to be an allowable business expense for a self-employed individual.
The second list of examples includes scenarios where the cost of training is unlikely to be an allowable expense.
Expense likely to be allowable
Example 1
A wedding photographer works part time. They want to improve their photo editing skills, so they attend an online refresher course on using photo editing software.
As they are updating their existing editing skills which are related to their business, the cost of the course is likely to be an allowable expense.
Example 2
A plumber runs their own business. They sign up to a beginners’ bookkeeping course at their local college. Although the course will not help them with the skills they need as a plumber, it will teach them how to keep accurate accounting records, which will help them to run their business better.
The course will improve their record-keeping knowledge and they will learn skills which they need for the purpose of running their business. The cost of the course is likely to be an allowable expense.
Example 3
A person is selling handmade pottery in their local town centre and now wants to sell their pottery online. They think this will help them reach more customers and increase their sales. They decide to complete an e-commerce course and then go on to complete a short, introductory course on website development.
Although the courses are not directly related to pottery, they will learn new skills so that they can move their business into online selling. The skills and knowledge they acquire will help them to keep up to date with the modern ways of selling. The costs of the course are likely to be an allowable expense.
Example 4
A website designer is completing a short course on using artificial intelligence (AI) technology so that they can add additional tools and functionality to the websites they design.
The course will give them new expertise in an upcoming area of technology related to their business. The costs are likely to be an allowable expense.
Example 5
A gas boiler fitter completes training to install heat pump systems. They think they will need these skills to future-proof their business, as heat pumps are new and upcoming technology and an alternative to gas boilers.
The cost of the training is likely to be allowed as an expense of the business as heat pumps will replace gas boilers and they are acquiring skills to keep up to date with modern technology.
Example 6
A personal trainer attends a course to improve their understanding of nutrition and gains a basic qualification in nutrition.
They want to learn about good nutrition as their clients expect them to have a basic understanding of nutrition. The knowledge that they gain will also help them to develop better training plans for their existing clients, so the cost of the course will be an allowable expense.
Example 7
An author runs an online store selling children’s storybooks that they also write. They want to start drawing the illustrations for their books because they think this will improve the books and save them the cost of paying for an illustrator to create the drawings. They decide to attend a beginners’ course on drawing illustrations.
The cost of the course is likely to be an allowable expense because they are using their skills to improve the children’s storybooks that they create.
Expense likely to be disallowable
Example 8
An unemployed person wants to become a driving instructor and start their own business. They complete a course so that they can become an approved driving instructor and want to claim the cost of the course as an expense.
They cannot claim the cost incurred on the course because the course provides new skills which will help them to start a new business that does not already exist.
Example 9
A shop owner runs a sportswear shop selling branded clothing. They enrol on to a sports science degree at their local university because they have an interest in the field and thinks it will help them to understand their customers better.
The costs associated with the degree course will not be an allowable expense because the knowledge they acquire will not specifically help them to sell sportswear. The costs are therefore unrelated to their business.
Example 10
A freelance makeup artist wants to move into the tattooing business and open their own tattoo studio. They undertake several tattooing courses and want to claim the costs as an expense.
The costs of the tattooing courses were not incurred for the purpose of their existing business and are unrelated to their makeup artist business, so the costs of the course are not allowed as an expense.
Example 11
A taxi driver wants to change their business and move into the painting and decorating industry. They complete a painting and decorating course at their local college and want to claim the costs of the course.
The cost of the course was not incurred for the purpose of their existing taxi driving business and is related to the painting and decorating business they plan to set up, so it is not allowed as an expense.