Is my training tax deductible?
Updated: Jul 23, 2020
What is the tax status of training costs for the self employed in the wellness sector?
Yoga or Pilates teachers, personal trainers, therapists - you are experts in your field and want to stay up to date. It's likely you will attend classes and courses yourself - but can you set the cost of these against your tax bill?
Unfortunately its not as straightforward as it might sound.
If the class / training serves to keep you able to deliver your existing services at an appropriate standard, or to update your expertise - then this is probably ok
If the class / training is to acquire 'new' skills, or is primarily for your personal pleasure then mostly likely it is not tax deductible
So let's think about some typical scenarios for a yoga teacher:
Initial teacher training = ❌ Not tax deductible. This is acquiring a new skill
Attending a class run by a more experienced teacher = ✅ Probably tax deductible. You are maintaining / developing skills for running your business
Attending a course in Yin Yoga when you normally teach Hatha = ✅ Probably still tax deductible. Many teachers use a variety of yoga styles in their class offerings so this should still fall within the bracket developing your existing services.
Attending a course in Reflexology = ❌Not tax deductible. This is acquiring a new skill and is not developing your yoga.
Attending regular classes run by your peers = ✅ Probably tax deductible. You need to maintain a certain level of fitness and flexibility. Your own enjoyment of the classes and wish to maintain good health can be considered incidental to the purpose. Take care though if your attendance looks excessive - the taxman might argue the purpose is no longer 'wholly and exclusively for the purposes of trade'
Going on a yoga retreat = ✅ Probably tax deductible. As long as the principles above still apply in that it is developing an existing skill rather than introducing new ones. Take care though with yoga 'holidays'. If it can be established that the primary purpose is pleasure and/or there are significant elements of sightseeing etc it might not be tax deductible.
As you can see there is significant scope for 'grey areas'. The principles above originate from decisions made by courts and tribunals who are themselves interpreting the law, and each new case brought brings some additional nuances. It helps to remember that the underlying principle is that the cost should be 'wholly and exclusively for the purpose of your trade'. The more you can evidence the link between the cost and your trading activities the better.
The information contained within in this article is provided for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice specific to your own circumstances from your own adviser.