This Content Was Last Updated on April 5, 2023 by Jessica Garbett
Courses, Training and CPD
There is often confusion around claiming training costs, including attending other classes/workshops as CPD.
The rules are that training to give you new skills, or take you into a new area of work, cannot be claimed; CPD style training to maintain existing skills can be claimed.
New skills training is considered to be incurred to put you in the position of being able to work, rather than as a requirement of working, so its disallowed. This would cover initial teacher training and any course which covered areas you were not previously trained in.
On the other hand CPD, to keep your skills fresh, can be claimed.
- Suppose you teach Ashtanga and do a course in Restorative Yoga – is that a new skill? Probably not, its just CPD as a yoga teacher and developing existing skills, so its likely to be acceptable.
- However suppose you did a course in Sports Massage? Well that is almost certainly a new skill.
Obviously the dividing line isn’t always clear. Be prepared to justify a claim to HMRC at a later date and think about Satya and Asteya.
Travel and accommodation for CPD can be claimed if the course itself is deductible. There is no outright bar on expensing foreign travel for training, but be aware it may be scrutinised by HMRC so be prepared to justify it as training and not a holiday.
Retreats and Holidays
Similar principles apply to yoga retreats and holidays – they can be claimed if they are training in nature rather than simply pleasure, but this is judgement.
Pure Yoga Holidays cannot be claimed.
Many Yoga Teachers attend classes with other teachers for development and mentoring.
Weekly classes with a senior teacher that fit that criteria would should count as CPD and can be claimed; by contrast attending a class purely for pleasure cannot be.
In their Internal Manuals, HMRC say:
Expenditure incurred by the proprietor of a business on training courses for themselves is revenue expenditure if the course merely updates existing expertise or knowledge. Expenditure on a course which provides new expertise or knowledge is capital.
Revenue expenditure is allowable against profits; capital expenditure isn’t, unless covered by Capital Allowances (which only apply to equipment, not services)
HMRC’s views were originally published in Tax Bulletin 1G in November 1991:
There is some uncertainty whether the cost of proprietors of a business attending a training course, directly related to the business activity, is deductible in arriving at the [trade] profits chargeable to tax.
Where attendance at a course is intended to give business proprietors new expertise, knowledge or skills, which they lack, it brings into existence an advantage that 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 [S33 Income Tax (Trading and Other Income) Act 2005 (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 [S34(1)(a) ITTOIA 2005]’ – see BIM42105.
Their guidance to Tax Inspectors is:
You should therefore allow proprietors a deduction for expenditure that merely updates existing expertise or knowledge but disallow any expenditure that provides new expertise or knowledge (particularly where it brings into existence a recognised qualification like a Master of Business Administration).
Remember HMRCs guidance is not law. It’s their interpretation of law, which can only be created by statute or court decision. However going against HMRCs guidance is something people should not do lightly.