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How can contractors fund their Continued Professional Development?

How can contractors fund their Continued Professional Development?

With strong demand for contractors, there’s increasing competition within this lucrative fast-growing sector. Contractors who are able to demonstrate the most up-to-date expertise will be in a position to pick and choose from the best contracts, while also negotiating better remuneration and contractual terms. Investing in your professional development through training is essential, but without the financial backing of an employer, it can also prove expensive. Although contractors will inevitably have to self-fund some of their professional training, there are a number of grants, loans, bursaries and schemes that may be able to help reduce costs. With no employment ties, contractors can opt to take extended learning sabbaticals, short courses between contracts, or train while they work. Contracting Scout take a look at some of the financial support options for contractors considering Continued Professional Development (CPD).

Tax relief

If you’re a limited company contractor, you can claim tax relief on training courses as long as the course is relevant to your line of work. HMRC rules dictate that if a cost is wholly and exclusively for the use of the business, you can claim tax relief against the expenses. In order to qualify for expenses, the CPD training must have the goal of providing, enhancing or reinforcing the contractor’s ability to perform their work. Any costs associated with undergoing training, such as the costs of travelling to an alternative location or accommodation, are allowable, as long as the training takes place at a temporary location. You can’t claim expenses on degree courses or the cost of ongoing qualifications.

Research and development relief: The government has allocated around £1.5bn of tax relief per year for research and development (R&D) activities. In very specific cases, if your limited company has undertaken some R&D work, or even if you’ve worked as a subcontractor for another company on their R&D project, you could be eligible for tax relief. The project criteria for R&D work must show significant investment in something that’s aiming to advance science or technology. This could include the development of new software, systems or equipment.

Training incentive schemes, fast track and “earn while you learn”

For certain sectors with staff shortages, the government is offering training incentives. Grants are currently available in healthcare and education to address chronic staff shortages. The recently commissioned “Closing the Gap” report warned of a 250,000 NHS staff shortfall by 2030 if steps aren’t taken to train more people in medical healthcare occupations. To address this, one of the report’s key recommendations is the introduction of annual cost of living grants of around £5.2k for student nurses on top of the current means-tested loan system. Once qualified, many medical health professionals choose to work as contractors as the high demand can prove extremely lucrative with rapid career acceleration opportunities.

Accelerated courses: Accelerated learning courses offer a full-time intensive training option for highly experienced and skilled individuals capable of achieving qualified status over a shorter period than the standard option. To support your training, you could access a tax-free bursary or scholarship. Alternatively, you could earn a salary while training. Fast track opportunities currently exist in education and medical healthcare.

If you’re interested in qualifying to be a teacher in two terms, you can now do this on an accelerated course. A fast-track teacher-training course aimed at filling staff shortages in rural areas also received official accreditation in 2018. QTS opens up a wide range of roles in addition to the traditional teaching route, including opportunities within the contracting sector.

The Think Ahead programme is a new route into social work for graduates and career-changers. It offers a two-year graduate programme in mental health social work. You’ll be paid to work in an expert team alongside clinical professionals, study for a master’s degree in social work, and develop your leadership skills. High demand for social workers and mental health professionals means that many qualified individuals choose to work on a contractual basis.

Apprenticeships: Training apprenticeships are becoming a sustainable way of offering people the chance to acquire new skills while also providing businesses with affordable access to talent. One such initiative aims to meet the demand in the IT sector fuelled by the boom in new technology. Headquartered in Manchester, Code Nation provides training in coding and in cyber skills. Broadly based on a model of short, sharp and intense courses, much of Code Nation’s income comes from the Apprenticeship Levy and is aimed at individuals with technical aptitude but no specific training in these niche areas. Demand for IT contractors is particularly strong and a short or extended apprenticeship could help contractors develop new skills and valuable contacts.

Private sponsorship: Although your client can’t pay for your training, there’s nothing to stop contractors looking for funding from private investors in order to undertake training, as long as they’re not being paid to undertake it. Contractors should be aware of the terms of any private sponsors and should always take care not to comprise their tax status.

On-Assignment learning: In many cases, contractors may be able to tailor the contracts they choose in order to develop their skills. Projects that offer the chance to work on new research or with new software and equipment could provide an excellent win-win situation for both the client and the contractor. If you can demonstrate that your previous skills make you an ideal choice to work on cutting edge projects, you’ll be able to develop niche skills that few other contractors can offer. It also means that you’ll have an opportunity to work with innovative clients, who will enhance your career and CV while giving you paid, hands on experience of how to apply your new skills. In some cases, it may be worth you speaking to the client about the R&D tax relief; although the client will not, and more importantly should not, pay for your training, they might be able to apply for the tax relief, which could improve your chances of training on the job.

There’s also a range of private and government funded grants available on an individual application basis. These cover all sectors, from science and technology to arts based training and research. Contractors should take the time to thoroughly research their proposal and how it can benefit the sector they work within, as well as their own career development. Structuring your application so that it clearly identifies how the funding will develop your existing skills and expertise to meet a current demand is vital and may require you to think outside the box. Contractors who receive a grant to complete training will need to consider how this will affect their work schedule and their earnings. Below are some links to general funding bodies that could offer contractors financial assistance:

https://www.bmh.manchester.ac.uk/study/cpd/funding/

https://www.icriconservation.ie/grants-bursaries

https://www.myworldofwork.co.uk/learn-and-train/funding

https://www.gov.uk/government/organisations/education-and-skills-funding-agency

https://www.artscouncil.org.uk/funding/other-sources-funding

Contractors should view their career development as a wise investment. The ability to keep up with market demand and offer clients the most sought after skills will act as a major differentiator between contractors in the future. Our article about how to keep developing your skills as a contractor further explains the importance of career development for contractors.

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