Providing or funding training for employees is not just improving the individual. Research shows that employees who are receiving training and development are more likely to stay with their employer and utilise their newly acquired skills within the business. The cost of training is adding value to your business and should be considered as a maintenance cost for the intellectual capital of the business.
The investment in training is encouraged by Revenue. Where the employer pays the full cost of training, this cost can be treated as any other expense in the Profit & Loss account. Refunds of course or exam fees to an employee which have been paid by the employee, or direct payments of course or exam fees by the employer, will not be treated as giving rise to a taxable benefit where the course undertaken is relevant to the business of the employer.
A course is regarded as relevant to the business of the employer where it leads to the acquisition of knowledge or skills which are -
necessary for the duties of the employment,
or, directly related to increasing the effectiveness of the performance of the director’s or employee’s present or prospective duties in the office or employment.
Examination Awards made to an employee, in the context of passing an examination, or acquiring a qualification which bears some relationship to the employees duties, is one of the few remaining benefits not subject to tax. This treatment is subject to the condition that the award is an amount that can reasonably be regarded as a reimbursement of expenses likely to have been incurred in studying for the qualification or sitting the examination. However, special increments of salary awarded on passing an examination or other such “recognition” payments are chargeable as part of an employee’s remuneration in the normal way.
Employees can also claim tax relief for approved undergraduate courses.
Approved Undergraduate Courses must:
- be carried out in an approved college;
- be of at least 2 academic years duration; and
- in the case of courses carried out in colleges and institutions that require approval by the Department of Education and Science for the purposes of this tax relief, the course must be approved by that Department
How may the relief be claimed?
- You can apply for this relief by completing the application form.
- You should retain a receipt from the course provided in relation to tuition fees for which relief has been claimed as it may be requested for verification at a later date.
- Relief shall only be given for one approved course per person in respect of the year of assessment.