Training & CPD – what can you claim for tax?
What you can and can’t claim for tax relief for training seminars and CPD throws up all sorts of questions. The main reason for this being that there are one or two grey areas that need a little unravelling. Most doctors and dentists have a CPD requirement each year and usually fulfil this through a combination of seminars, events and private reading. Many also choose to continue their studies further with more substantial courses such as Masters degrees. What are the rules on claiming tax relief for ongoing education?
The wholly, exclusively and necessary rule
When it comes to tax legislation in general, costs become allowable when the expense is “wholly and exclusively” for business purposes. It also has to be completely “necessary” for business operations.
When assessing if training and CPD are allowable for tax, the same rules apply.
Maintaining existing knowledge
Doctors and dentists have a requirement to keep their knowledge and skills up-to-date. This is essential, or in other words, necessary, for the safety of the patients and to ensure the reputation of the individual and the practice is kept high.
There is typically also an obligation to maintain their professional subscriptions though bodies such as BDA, BMA, GDC and GMC and this often requires the attendance of certain events.
Read our related article: Deduct the cost of your professional subscriptions
Therefore, seminars and courses that fulfil this role of maintaining and updating existing knowledge are deemed allowable for tax.
Travel and related expenses
Travel and other costs such as subsistence and accommodation are allowable for tax relief as well, provided the course or training event is allowable in the first place.
It’s important to remember again the “wholly and exclusively” rule, which needs to be applied to everything regarding claiming tax relief.
Read our related article: Tax treatment of travel for doctors and dentists
If you attend a course in Edinburgh, which lasts 3 days yet you decide to stay an extra week to take a holiday and explore Scotland, then the whole cost of the travel would become disallowable, even if the course itself was allowable. This is because there is now a personal element to the cost.
The accommodation and other costs related to the specific days of the course would be allowable but everything else would unfortunately be deemed to have a personal element too and therefore not “wholly and exclusively” for business purposes.
Gaining completely new knowledge
On the flip side of this, are situations where the doctor or dentist is gaining completely new knowledge. Generally gaining completely new knowledge (e.g. retraining as an electrician) is disallowable for tax if paid for by an individual who is self-employed, as this is deemed to be capital in nature. However, if the training is paid for by a company of which the individual is an employee or office holder (e.g. a director) then the costs may be deductible by that employer if the cost is necessary for the purpose of the business.
This difference in tax treatment means that any large training costs should be considered in advance to ensure the maximum amount of tax relief is obtained.
Maintaining “and” gaining knowledge
There are occasions where a course or seminar may actually cover both keeping up to date with current knowledge as well as gaining some new knowledge. In these cases, it is possible to apportion part of the cost as allowable and the rest disallowable depending on individual circumstances.
HMRC can enquire into the tax deductibility of expenses, in the event of such an enquiry it will be necessary to justify the nature of the expenditure to HMRC.
It can get tricky in splitting these types of costs though so always best to seek help from your accountant.
Dentists: An easy way to manage your CPD
Don’t forget to log your CPD using the application provided by CPD Pro – it’s an easy way to keep track of the hours of learning you do each year. Reading our blogs also count so you can earn CPD credit and keep up to date with the latest tax and business news!
If you are attending a course or seminar this year or are thinking about enhancing your professional knowledge then contact the team at Lansdell & Rose who can clarify the tax relief situation in advance and ensure you are claiming correctly.
T: 020 7376 9333