Higher Education tax break. Is there such a thing?

spongy · Jan 10, 2017

I'm studying for a HNC through work, me and my boss agreed to go 50/50 on costs.

I looked in to a student loan but decided not to as the interest involved and the sheer amount of time it would take to pay off wasn't very good.

My boss has agreed to front the costs and I've got 1.5 years to pay him 3k back as it stands.

We agreed that I'd pay him back out of my pay packet every month which was fine by me but I had a chat with the accounting lady at work and she said she'd have a look into a way for it to be taken out at source and get a bit of a tax break and has thus far been unsuccessful.

This is more of a question for the finance people on here I suppose, is there any way to save a bit of money? I find it strange that there are grants available and tax break schemes to help with nearly everything but not education.

warmleyseagull · Jan 10, 2017

Your accounting lady is looking to see if the deduction can be made from gross income, and answer is no, there is no methodology for employers to reduce gross income for training costs.

In theory (and you didn't hear it on here) your employer could pay for all the course and you have a salary sacrifice for the 50% but the rules on salary sacrifice have been taken tightened up in Autumn Statement and, TBH, a salary sacrifice scheme as blatant as this was probably never kosher.

So your best bet is for employer to make the course an integral part of the job by saying a HNC is an essential requirement of your employment. You would then (probably) be able to claim relief by submitting P87 (google HMRC P87) and see what HMRC say. The rules on deductions for employment income are tight (professional subs, tools and related equipment are allowable but not much else) but it is worth a try.

bluenitsuj · Jan 10, 2017

spongy said:
I'm studying for a HNC through work, me and my boss agreed to go 50/50 on costs.

I looked in to a student loan but decided not to as the interest involved and the sheer amount of time it would take to pay off wasn't very good.

My boss has agreed to front the costs and I've got 1.5 years to pay him 3k back as it stands.

We agreed that I'd pay him back out of my pay packet every month which was fine by me but I had a chat with the accounting lady at work and she said she'd have a look into a way for it to be taken out at source and get a bit of a tax break and has thus far been unsuccessful.

This is more of a question for the finance people on here I suppose, is there any way to save a bit of money? I find it strange that there are grants available and tax break schemes to help with nearly everything but not education.

How much is your HNC in total if you need to pay back £3k to your boss and is it HNC in business?

spongy · Jan 10, 2017

warmleyseagull said:
Your accounting lady is looking to see if the deduction can be made from gross income, and answer is no, there is no methodology for employers to reduce gross income for training costs.

In theory (and you didn't hear it on here) your employer could pay for all the course and you have a salary sacrifice for the 50% but the rules on salary sacrifice have been taken tightened up in Autumn Statement and, TBH, a salary sacrifice scheme as blatant as this was probably never kosher.

So your best bet is for employer to make the course an integral part of the job by saying a HNC is an essential requirement of your employment. You would then (probably) be able to claim relief by submitting P87 (google HMRC P87) and see what HMRC say. The rules on deductions for employment income are tight (professional subs, tools and related equipment are allowable but not much else) but it is worth a try.

Cheers. I'll have a look at that.

bluenitsuj said:
How much is your HNC in total if you need to pay back £3k to your boss and is it HNC in business?

HNC in manufacturing engineering.

£6k total. 8 units at £750 per unit. 4 units a year on day release.

NooBHA · Jan 10, 2017

spongy said:
I'm studying for a HNC through work, me and my boss agreed to go 50/50 on costs.

I looked in to a student loan but decided not to as the interest involved and the sheer amount of time it would take to pay off wasn't very good.

My boss has agreed to front the costs and I've got 1.5 years to pay him 3k back as it stands.

We agreed that I'd pay him back out of my pay packet every month which was fine by me but I had a chat with the accounting lady at work and she said she'd have a look into a way for it to be taken out at source and get a bit of a tax break and has thus far been unsuccessful.

This is more of a question for the finance people on here I suppose, is there any way to save a bit of money? I find it strange that there are grants available and tax break schemes to help with nearly everything but not education.

Here is a ''roundabout way'' of getting some tax relief on it - if your Employer will agree to pass his saving on to you

If your course directly relates to your job then your Employer will have the cost of your course relieved as Training Costs in his accounts. Lets say the full cost of the course is £6K @ 20% Corporation Tax = £1200

If he is willing to pass some of that on to you then get him to provide you with a company mobile phone in the company name where the contract is between your employer and phone provider, where they pay the bill for a couple of years for you.

There would be no tax or NIC on the provision of the phone your employer gets relief on its running cost and you get a free phone and calls for a couple of years. The saving for you would be the cost of running your own phone for 2 years.

Not a massive saving but better than a punch in the eye

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Higher Education tax break. Is there such a thing?

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spongy

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warmleyseagull

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bluenitsuj

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spongy

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NooBHA

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