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I'm newly self employed so forgive me if this is a silly question.

My client has offered to pay for half of a training course I want to go on as the sole payment for my services. The value of that is fair.

I would pay them the remaining fee for the course then they will pay for the course for me. I trust them with this arrangement.

I'm happy with the terms but it's obviously a little unusual.

But what does this mean from a tax perspective? Will I have been paid the full value of the course, half of it or nothing at all since no money has moved into my account?

If technically I've not been paid anything, are there any minimum wage implications?

Perhaps I'm technically a customer of theirs and volunteering my time since I paid them for a subsidised course?

Are there any other side effects of this arrangement I haven't thought of?

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  • Is the training course related to your self-employed work? If so it'll be a legitimate business expense for you anyway so probably tax neutral.
    – GS - Apologise to Monica ♦
    Jul 23, 2022 at 14:03
  • Thanks for the question. Yes, it's directly related to my business. Completing the course will benefit myself and also my client. Tax neutral sounds good but will it still need accounting for as 50% income and then an equal business expense?
    – Kichi
    Jul 23, 2022 at 14:13

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HMRC suggests:

You’ll need to pay Income Tax on the amount of all disguised remuneration loans or payments made, [net of any scheme fees paid] — this will be calculated using the bands and rates in the years the loans or payments were made.

I you have an accountant who completes your tax return for you, you should consult them about how to present this activity in your accounts.

Consider also with them any VAT implications (if you are a VAT registered business). VAT fraud is a serious issue.

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