Can You Claim Training, Learning & Development Costs Through Your Limited Company?

Claim tax deductions for courses, books, memberships and more.

Written by 
Updated on
June 18, 2024

Introduction

As a freelancer or contractor, keeping up with the latest developments in your industry is key. In the constantly evolving landscape of skills and knowledge, investing in your own training, development, and learning is not just beneficial for your career growth but also for your company's financial health. 

The good news? Many of these educational expenses are claimable, helping you reduce overall tax liability. Let’s dive into understanding which training and development costs you can claim and how Mighty's automated accounting platform can streamline this process for you.

What can you claim for? 

Before we dive into specific examples, it's worth clarifying HMRC's rules when it comes to training costs. As with all business expenses, you need to be comfortable proving that the costs are wholly in the interest of the company. Specifically when it comes to training, it should be to enhance an existing skillset that is relevant to the company's trade activity. For example, the training should help you better perform your role for the business, thus making it a benefit for the business.

Training Courses

Whether online or in-person, professional training courses can be vital for enhancing your skills. These could range from industry-specific workshops to general business management courses. If the purpose of the training is to maintain or upgrade professional skills relevant to your business, the cost is typically seen as an allowable expense. This means your company can pay for the course and receive corporation tax relief on the cost.

Professional Memberships

Membership fees for professional bodies or trade associations are often overlooked. Not only does this keep you connected with industry peers and trends, but often they will include elements of ongoing development and training.

HMRC's Employment Manual, EIM329000, states that the costs of memberships can be corporation tax-deductible if "the activities of the body are of direct benefit to, or concern the profession practiced in, the performance of the duties of the employment". In plain English, if the costs of the membership are beneficial to your trade activity, it would satisfy this condition. However, there is another condition to be aware of, for the costs to be tax-deductible, the organisation needs to appear on HMRC's approved professional organisations and learned societies list (linked here).

Audiobooks and E-Learning Materials

With the digital age, learning isn't confined to traditional formats. E-books, audiobooks, and online learning materials focusing on skill development or business management can also be claimed. These modern learning tools can be particularly beneficial for busy freelancers and contractors seeking flexible learning methods.

Books and Trade Subscriptions

Keeping updated with industry insights and trends is vital, and trade subscriptions or books are great resources. Expenses for professional books, trade magazines, journals, and subscriptions that are relevant to your business can be claimed. Remember, these should be directly related to the nature of your freelancing or contracting work.

What can't you claim for? 

As well as understanding what you can claim for, it's important that you understand what you can't claim for. Here's a recap of some examples:

  • University or other degrees
  • Any training unrelated to your company's trade activity
  • Any training for new skills
  • Any professional memberships that don't appear on HMRC's approved list (linked here)

How to claim in Mighty

Mighty makes claiming these educational expenses quick and easy, taking care of your bookkeeping and applying the tax savings for you.

To claim any training or educational expenses in Mighty: 

  • Find the training/education transaction in your bank feed
  • Click categorise and select the ‘Training and Education’ under the day-to-day tab
  • Select the VAT rate you were charged (if you’re VAT registered)
  • Click approve

Once claimed you’ll notice a lower corporation tax bill on your dashboard.

If you're not with Mighty: You should either categorise this accordingly in your accounting software or let your accountant know what this specific transaction relates to.

Conclusion

Investing in your professional development as a freelancer or contractor is not just beneficial for your personal and business growth; it also makes good financial sense. By understanding and utilising the tax reliefs available for training and education expenses, you can develop your skills while lowering your tax liabilities.

To ensure you're making the most of your claimable expenses and staying up to date with the latest tax rules, consider leveraging the power of a platform like Mighty with expert UK based accountants on hand to help.

It's an easy, fast and affordable way to take care of all your accounting need while remaining HMRC compliant.  Get started with Mighty today! Try free, no card required. 

Content:
All your accounting sorted for just £49 pm
Try Mighty free
No credit card required

Accounting for the small & mighty

All your accounting, only £49+VAT per month

Try Mighty free
No credit card required

View similar posts

Or view all our resources