Section 311 — Income Tax (Earnings and Pensions) Act 2003: Retraining courses

Retraining courses 311 1 No liability to income tax arises in respect of the payment or reimbursement of retraining course expenses by a person (“ the employer ”) if the course conditions, the employment conditions and, in the case of travel expenses, the conditions in subsection (5) are met.

2 In subsection (1) “ retraining course expenses ” means—

a fees for the attendance of another person (“ the employee ”) at a training course, b travelling expenses incurred in connection with it, c fees for an examination taken during or at the end of it, or d the cost of any books which are essential for a person attending it.

3 The course conditions are that—

a the course provides training designed to impart or improve skills or knowledge relevant to, and intended to be used in the course of, gainful employment (including self-employment) of any description, b it is entirely devoted to the teaching or practical application (or both) of the skills or knowledge, and c it lasts no more than two years . ... d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 The employment conditions are that—

a the employee begins the course while employed by the employer or within the period of one year after the employment ceases, b the employee ceases to be employed by the employer before the end of the period of 2 years beginning at the end of the course and is not re-employed by the employer within the period of 2 years after so ceasing, c the employee is employed ... in the employment which is ceasing throughout the period of 2 years ending—

i when the employee begins the course, or ii if earlier, when the employment ceases, and d the opportunity to undertake the course, on similar terms as to payment or reimbursement of amounts within subsection (1), is available—

i generally to the employee’s fellow employees or former fellow employees in that employment, or ii to a particular class or classes of them.

5 The travel expenses must be—

a expenses in respect of which, on the assumptions in subsection (6), mileage allowance relief under Chapter 2 of this Part would be available if no mileage allowance payments had been made, or b expenses which, on those assumptions, would be deductible under Part 5.

6 The assumptions are—

a that attendance at the course is one of the duties of the employee’s employment, b that the employee incurs and pays the expenses, and c if the employee has in fact ceased to be employed by the employer, that the employee continues to be employed by the employer.

7 In this section “ mileage allowance payments ” has the meaning given by section 229(2).