What training expenses can you claim if you work for yourself?

Improving and maintaining your skills is essential to anyone who runs their own business. And, importantly, clients, regulators and even insurers expect you to keep your skills up to date.

For sole traders, the key question is whether the cost of courses and related expenses is tax-deductible.

The rules are stricter than you might expect.

HMRC usually allows you to claim the costs of training as a tax-deductible expense if it helps you maintain or update the knowledge you already use when running your business.

Where your training prepares you for a new business activity or a different profession, the cost is not allowable.

You can read HMRC’s official explanation about the differences at BIM35660.

The principle and practical test

Here are two questions to ask yourself before you consider claiming for training costs:

1. Does the training maintain or update skills you already use to run your business?
2. Does the training move you into a new trade or a line of work that is clearly different from what you do now?

If the first answer is yes and the second is no, the cost is usually allowable.

Keep a short note explaining why the training is necessary for your existing business, and hold on to evidence that supports any claims you make.

Find out more about expense claims in general in our guide to allowable self-employed expenses.

Some examples of allowable training claims

• An accountant keeps up their CPD so they can maintain professional status.
• An electrician takes a course on the latest wiring regulations to stay compliant.
• A personal trainer renews a first aid certificate so they can continue working with clients.
• A web designer signs up for an online course to sharpen skills already used in client projects.

In these examples, the person is improving existing skills.

Some examples of non-allowable training claims

• A builder enrols on an architecture degree to practise as an architect.
• A chef signs up for a coding programme to move into software development.
• A marketing consultant trains as a solicitor to change career.
• A yoga teacher buys a generic small-business marketing course; the link to the core service is too weak, so HMRC is unlikely to see it as wholly and exclusively for the trade.

HMRC views these as capital costs because they create a new asset. They are not involved in the day-to-day operations of the current business.

Examples at a glance

What about related costs?

If the training itself is tax-deductible, then any related costs can usually be claimed too, as long as they meet HMRC’s ‘wholly and exclusively’ rule, meaning they are 100% related to the training itself:

• Travel to and from the venue, including mileage where applicable.
• Reasonable overnight accommodation where needed.
• Books and course materials that are required for the course.
• Exam or assessment fees that form part of maintaining professional status.

Training costs from before you started your business

As a rule, pre-trading training costs are not deductible.

HMRC only allows a deduction for training that is incurred wholly and exclusively for the trade you are carrying on at the time the training is undertaken. If you were not yet trading, the cost fails this test.

There is a general relief for pre-trading expenses (within seven years before you start). However, it applies only to revenue costs that would have been allowable once trading had begun, such as initial advertising, rent, or professional fees.

It does not convert non-allowable training into a tax-deductible expense.

After you start trading, training that maintains or updates skills you use in your business is typically allowable; training for a new or unrelated trade is not.

For the underlying rules, see HMRC’s manuals at BIM42526 and BIM46351.

What about VAT?

If your business is VAT-registered, you may also be eligible to reclaim the VAT charged on training costs.

The key point is that the training must relate directly to your taxable business activities.

For example, a VAT-registered electrician attending a wiring regulations update course could usually recover the input VAT on the course fee, as well as on reasonable associated costs such as travel and accommodation.

The usual VAT rules apply, therefore make sure you receive a proper VAT invoice from the training provider and keep it safely with your records. Without a valid invoice, HMRC may refuse your claim.

It is also worth remembering that VAT cannot be reclaimed if the training is more personal in nature or not linked to the services you supply. In such cases, the cost is treated as a private expense rather than a business one.

For more details, see HMRC’s general guidance and the VAT guide (Notice 700) on GOV.UK.

How to back up any training expense claims

Use a consistent method for recording your training costs and keep clear evidence. This might include:

• The provider’s name, course title, date and cost
• A brief note explaining how the course maintains or updates your current skills
• Receipts for any travel, accommodation or materials you are claiming

Once you have everything recorded, add the totals to your business expenses in your Self Assessment return.

Well-kept records not only reduce the risk of missing a claim but also make it far easier to deal with HMRC if they ask any questions later on.

See our overview of allowable expenses for more details.