EIM05030 | Employment income: retraining expenses paid by employer: withdrawal of exemption: notification by employers of failure to comply with conditions for exemption: HMRC's power to obtain information

Section 312 ITEPA 2003

Withdrawal of exemption

Any exemption allowed under section 311 ITEPA 2003 is withdrawn if any of the following events happens:

• the employee does not begin the course while employed by the employer, or within one year of leaving the employment, or

• the employee continues to be employed by the employer more than two years after the end of a qualifying course, or

• the employee is re-employed by the employer within two years of ceasing to be employed by them

Exemption is not withheld or withdrawn if the employee does not find a job or start a business, or if the employment or self-employment subsequently undertaken by the employee is in a field unconnected with the course, so long as all the other conditions in EIM05010 are satisfied.

Notification by employer (section 312(4))

The employer must give notice to HMRC within 60 days of coming to know of any of the three withdrawal events listed above.

HMRC’s power to obtain information (section 312(5) and (6))

If HMRC has reason to believe that a withdrawal event has occurred, but the employer has not reported it, HMRC may require the employer to provide such information as they may reasonably require. HMRC’s notice to the employer must be in writing, and must give the employer at least 60 days in which to provide the information.