Contractor's sums put a week's training at £3,500, an employee's at nil
Frustrated by the 5% expenses rule, a UKTECH reader has sent in the following useful comparison for training costs. The comparison highlights yet another difference in what the Government says, and what happens in reality.
The following quote concerning training costs is from the Paymaster General, taken directly from the Inland Revenue website.
"Our intention is that workers in service companies should be in the same position as employees with regard to what help they can get with training they pay for themselves." ( Full Statement )
However, the point she has overlooked is that employees do NOT pay for training themselves.
I have set out a direct comparison of training costs between a permanent colleague and myself and invite your comments before I post this on the number 10 forum.
Permanent employee
Independent Contractor
Typical 1 Week Manufacturers Course
Nil
Approx. £1400
NIC due on cost of course
Nil
10%
Employers NIC due
Nil
12.2%
Income tax due (best case scenario)
Nil
22%
Hotel expenses
Nil
Approx. 5*£80 + meals (minus 44.2% tax & NIC )
Lost earnings
Nil
5 * daily rate (minus 44.2% tax & NIC)
Total
Nil
Approx. £3500
Part Time OU Course
BA in IT & Theology
MSC in computing for industry & commerce
Cost of course to participant
Nil
£600-800 per term
NIC due on cost of course
Nil
10%
Employers NIC due
Nil
12.2%
Income tax due (best case scenario)
Nil
22%
Total
Nil
Approx. £12000
Although we are Limited companies and obviously do not expect a ‘disguised employer’ to bear the cost. However we should at least expect not to have to pay tax & NIC on top. After all, this is money we have SPENT not EARNT. The object of training is to keep ourselves marketable - not some obscure and perverse objective to withhold money from the governmental purse.
--
The Editor