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Where Taxpayers and Advisers Meet

BIK for driving lessons?

Incredulum
Posts:2772
Joined:Thu Dec 03, 2009 5:35 pm
BIK for driving lessons?

Postby Incredulum » Sat Feb 13, 2021 6:14 pm

An individual has a bright idea, and incorporates a company. He gets his friends to contribute through SEIS. The only fly in the ointment is that (at the age of 40) he cannot drive and absolutely needs to in order to get the bright idea working.

The company pays for the driving lessons. Benefit in kind? And if so, why?

No accountancy student receives a benefit from their employer.

There's an article on Tax Insider by Ray Chidell that suggests there should be no BIK.
https://www.taxinsider.co.uk/the-tax-result-depends-how-you-do-it-training-costs-ta

What do you think?

pawncob
Posts:4745
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: BIK for driving lessons?

Postby pawncob » Thu Feb 18, 2021 12:38 pm

https://www.taxadvisermagazine.com/article/making-work-related-training-work



Employees are not taxed as a benefit in kind on any benefit that they may receive, if their employer sends them on ’work related training’, providing that the employer incurs the cost of the course, or reimburses it.

However difficulties arise because not all training is deemed ’work related’; just because an employer pays for it, HMRC does challenge cases it thinks do not meet the exemption.
For tax purposes it is defined in s250 ITEPA 2003 as any training course or other activity which is designed to impart, instill, improve or reinforce any knowledge, skills, or personal qualities which:

are, or are likely to prove, useful to the employee when performing his/her duties
will qualify or better qualify the employee to undertake the employment, or to participate in charitable or voluntary activities arising through the employment.
Therefore a wide range of practical and/or theoretical skills will qualify for exemption so long as the skills are relevant to the employee.

No BIK.
With a pinch of salt take what I say, but don't exceed your RDA

Incredulum
Posts:2772
Joined:Thu Dec 03, 2009 5:35 pm

Re: BIK for driving lessons?

Postby Incredulum » Mon Mar 08, 2021 8:34 pm

Thanks Pawncob. (Missed your reply earlier, sorry!)


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