EIM01315 - Employment income: further education and training costs: Individual Training Accounts: exemption

Section 255 ITEPA 2003

Section 255 ITEPA 2003 prescribes that there is no liability to income tax in respect of income from a current or former employment which arises by virtue of the provision to an employee of Individual Training Account training that is given by a person who is not the employee’s employer or former employer.

Individual Training Account training is defined by section 256 as meaning training or education of a kind that qualifies for grants authorises by regulations under section 1 of the Education and Training (Scotland) Act 2000.

The exemption applies to any payment to the person giving the training in respect of the cost of provision, any benefit incidental to the training that is provided to the employee, and the payment or reimbursement of any costs.

Costs are defined as:

• costs which are incidental to the employee undertaking the training
• expenses occurred in connection with an examination or assessment of what the employee has gained
• the cost of obtaining any appropriate qualification, registration or award to which the employee becomes or may become entitled

An employee is eligible for the exemption if they are a party to arrangements that qualify under section 2 of the Education and Training (Scotland) Act 2000.

There are some circumstances in which the exemption does not apply. See EIM01320 for details of those circumstances.