Funding agreement repayment - should this be done before or after tax?

[RainSoakedNights]

I had a funding agreement from my current job. I am leaving, and it’s being deducted from my wages to pay back.

I’ve had my first payslip of it being deducted, and it was done after tax (so my tax that I’ve paid is the same as normal). I just wanted to double check that this is correct?

What is the agreement for? Eg was it a repayment for training etc?

Exam fees.

I question the exact legality of making me pay back the entire sum, but I can’t be bothered to fight it.

Depends on the agreement eg my dd has a 4 year commitment for funding her training.

I have (had) a two year - but my understanding is that as soon as it’s signed, they’re meant to pro-rata it as they’re obtaining the benefit of the cost from you. But I really can’t be bothered to be honest!

It’s right that it comes out post tax. It’s essentially a bit like a loan that gets written off if you fulfill certain conditions.

Yes, I'd say post tax is correct, exam fees aren't tax deductible.

I've also never heard of an agreement where repayment would be pro-rata.

That’s the law - they’re supposed to reduce the amount that you repay based on how long you’ve stayed after being paid. Because they take the benefit of paying you, so the amount you pay gets reduced down. I think

I think it all depends on how it was contracted?

it would only be taken pre tax if you had agreed to a salary sacrifice. Likewise how much you need to repay, it should be in your contract?

I’m not sure that’s an actual law, some training contracts do reduce it down do 50% after 12 months etc. Some places make you pay back training fees for extortionate“in house” training which I think has been pro rata’d down but exam fees are pretty clear cut. If your contract says you will hsve to repay these if you leave within x time and you do then they need repaid.

If it wasn’t taxed when they paid you / paid on your behalf then yes, it should be deducted after tax as well.

Damn. I was hoping I could get them, oh well!

If the training is essential for your work you may be able to claim a tax deduction yourself through your tax return. Read the rules carefully though, you can’t claim improvement courses. https://www.gov.uk/expenses-if-youre-self-employed/training-courses .