Income Tax (Earnings and Pensions) Act 2003 section 257

Exception for non-deductible travel expenses

Section 257 restricts the training exemption under section 255 so that it does not cover travel or subsistence costs unless those costs would otherwise qualify for tax relief in their own right.

• The general exemption for employer-funded training (section 255) does not automatically extend to travel or subsistence provided, paid or reimbursed in connection with that training.
• Travel qualifies only if mileage allowance relief would have been available (condition A) or if the expenses would have been tax-deductible under the general employee expenses rules (condition B).
• Subsistence — covering food, drink and temporary living accommodation — qualifies only if it meets condition B, i.e. would have been deductible under the general employee expenses rules.
• Both conditions are tested on the assumption that the employee undertook the training as a duty of the employment and personally incurred and paid the expenses.