Is outplacement support taxable?

In the UK, outplacement support is exempt from income tax when it meets the conditions in section 310 of the Income Tax (Earnings and Pensions) Act 2003. The exemption covers your employer paying for the support directly, and your employer reimbursing fees you’ve paid yourself.

1. Purpose. The main purpose is helping you adjust to leaving the job, or find other paid work, including self-employment.
2. Nature. The support consists of advice and guidance, skills training, or access to office equipment or similar facilities.
3. Length of service. You were employed in that role throughout the two years before the support starts or the employment ends, whichever is earlier.
4. Availability. The same support, on similar terms, is generally available to the employer’s employees or former employees, or to a particular group of them.

It’s an exemption, not a deduction. If you pay for support yourself and your employer doesn’t reimburse you, you can’t claim tax relief on it.

Career Fast Track is built to help you land your next senior role, through advice, guidance and skills training. You pay me directly and I invoice you, showing your employer if HR needs it, so they can reimburse you. No VAT is charged.

Whether your reimbursement qualifies depends on your circumstances, so check with HR or your tax adviser before you pay. Here’s how to ask.

This is general information about UK tax rules, not tax advice. Rules differ in other countries. Sources: ITEPA 2003, section 310 and HMRC Employment Income Manual, EIM13745.