Income Tax (Trading and Other Income) Act 2005 section 75

Retraining courses: recovery of tax

Section 75 deals with the recovery of tax where an employer has claimed a deduction for retraining course expenditure under section 74, but the conditions for that deduction are subsequently found not to have been met.

• If an employer claimed a deduction under section 74 for retraining course costs, and the employee either fails to start the course within one year of leaving employment or remains in or returns to the employer's employment, HMRC may raise a discovery assessment to recover the tax that should have been paid
• Any such assessment must be made within six years of the end of the tax year in which the relevant condition was broken
• The employer must notify an HMRC officer within 60 days of becoming aware that the employee failed to start the course, continued in employment, or was re-employed
• A notice from HMRC may set a deadline of no fewer than 60 days for the employer to provide the required information