Q&A CAN I CLAIM TAX RELIEF ON TRAINING?
Q: A few years ago, I decided to set up my own business providing IT solutions for small companies. My area is quite niche, and while I have many qualifications I’ve seen a course advertised that would enable me to expand my services. It’s not a postgraduate course as such, more of a further professional training course.
While the financial benefits might be huge in the long term, in the short term my bottom line will take a hit as the fees are fairly hefty. As a sole trader, and the sole earner in my family, things will be tight and I was wondering if there was any assistance available for training?
A: Undertaking further training is an essential component in any business. It can be a fiscally demanding undertaking, but broadening your range of services is a clever move, especially in a fast-paced industry such as IT.
Revenue have a tax relief programme to help offset the cost of sharpening your skills. Tax relief, as I’m sure you’re aware, reduces your tax liability on moneys earned. This information relates to training courses only, postgraduate courses are subject to different criteria.
In order to qualify, your training course must fall into one of two areas – foreign languages or information technology. These are looked on as two areas that have the potential to make Ireland more competitive on the world stage, so it’s in the interests of the country to support it. As your business is IT based it falls into one of these categories.
There are a few other criteria to meet in order to qualify for tax relief. Your training course must be approved by FÁS, be of less than two years duration, and result in a certificate. That certificate must be one of competence in the area, not just of attendance.
Your course must cost more than €315 to qualify for the relief, and the maximum relief available is €1,270. Administration, registration and examination fees are not covered by the relief. Any portion paid for by an employer is also not eligible, but as a sole trader that is not applicable to you. You can also only claim tax relief for one training course in any tax year.
If you pay your fees in instalments, and any payments are made in the tax year following the year in which the course began, you can either claim for relief in the tax year that the course commenced, or in the tax year when the actual instalment was paid. Any claim must be made within four years of the tax year to which the claim relates.
There is a list of courses that are approved for this tax relief, and they are renewed on an annual basis and are available on the Revenue website.
Declan Dolan
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