Economy Minister Dr Caoimhe Archibald has announced that Encirc, the glass manufacturer and bottler at Derrylin in Fermanagh, is investing more than £700,000 over three years in skills development for its workforce. Invest NI is putting £157,200 towards it. Read the headline and it sounds like a straightforward top-up to a training budget. Work through what happens to that £157,200 on a tax return, though, and it behaves nothing like the equipment grants we usually write about here — because training spend and the grant that helps fund it are taxed on completely different rules to a grant towards machinery.
That distinction is not a technicality. Northern Ireland businesses taking Invest NI or council support towards staff development, rather than kit, are applying a different part of the tax code entirely, and getting it wrong in either direction either overstates how much a grant is really worth, or misses a deduction the business is fully entitled to.
What Invest NI actually announced
Encirc is part of the Vidrala group and produces around three billion glass containers a year for leading global brands across the UK from its Derrylin site. The £700,000 funds a new "One Horizon Programme," described as a continuous professional development initiative covering leadership capability, specialist engineering skills for low-carbon technologies, digital and data skills, and AI awareness. Invest NI's release ties the investment directly to Encirc's goal of manufacturing glass without generating carbon emissions from 2030.
Dr Archibald said Encirc "is an important employer in Fermanagh and a leading manufacturer with a clear vision for a sustainable future," and that the investment "will help its employees develop the technical, digital and leadership capabilities needed" to support that goal. Sean Murphy, Encirc's Managing Director, said the Invest NI support "is enabling us to accelerate this investment so that we can develop the highly skilled workforce needed to support our ambition of producing glass without generating carbon emissions," and that it will help keep the Derrylin site "at the forefront of sustainable glass manufacturing."
The number worth sitting with: 22.5%
Invest NI's own figure for the total spend is "more than £700,000" rather than an exact total, so the maths below works from that reported figure. Taken at face value, £157,200 against £700,000 comes to roughly 22.5% — just over a fifth, with Encirc finding the remaining £542,800 itself over the three years the plan runs.
| Encirc training investment, announced 24 September 2026 | Amount | Approx. share |
|---|---|---|
| Total training plan cost (Invest NI's own figure) | more than £700,000 | 100% |
| Invest NI support | £157,200 | ~22.5% |
| Funded by Encirc itself | ~£542,800 | ~77.5% |
That is a genuinely useful contribution to a three-year skills programme. But whether £157,200 of it is worth £157,200 to Encirc's bottom line, once tax is accounted for, is a different question — and it is where a training grant and an equipment grant part company.
Why a training grant is not taxed like an equipment grant
We have written before about what happens when Invest NI or a council contributes towards machinery: under Capital Allowances Act 2001 sections 532 and 533, that contribution is netted off before capital allowances are worked out, so the business only ever claims relief on the money it found itself. A training grant does not work that way, because staff training is not capital expenditure — it is a normal, fully deductible revenue cost, exactly like wages, rent or insurance.
Instead, HMRC's Business Income Manual, at BIM40451, sets out the general rule for grants that meet revenue expenditure: they are "normally trading receipts," a principle drawn from case law including Smart v Lincolnshire Sugar Co Ltd (1937) and Burman v Thorn Domestic Appliances (Electrical) Ltd (1981). In practice that means two things happen side by side rather than one offsetting the other: the business gets a full deduction for every pound it spends on training, and separately, the grant itself is added to taxable trading income in the same period. Nothing is netted off before the deduction is calculated, unlike the capital allowances rule. The grant is simply extra income, taxed at whatever rate applies to that year's profit.
Putting illustrative numbers on it
Scale Encirc's roughly 22.5% grant share down to a size more typical of a Northern Ireland SME, without claiming to know Encirc's own tax position. Say a 30-employee Fermanagh engineering firm runs a three-year, £120,000 upskilling plan, and Invest NI's training support covers £27,000 of it — the same 22.5% share. Assume the company's taxable profit sits under £50,000 in the relevant year, so it pays corporation tax at the 19% small profits rate.
| Illustrative Fermanagh engineering firm, £120,000 training plan, 22.5% Invest NI grant | Amount |
|---|---|
| Full training spend, fully deductible | £120,000 |
| Tax relief on the full spend, at 19% | £22,800 |
| Invest NI grant received, added to taxable income | £27,000 |
| Extra tax due on the grant itself, at 19% | £5,130 |
| Net after-tax value of the grant (£27,000 − £5,130) | £21,870 |
The shortcut many owners reach for — "we got £27,000 free, so the plan really only cost us £93,000 before the usual tax relief" — is not quite right, because that treats the grant as if it sat outside the tax computation. It does not. The business still claims relief on the whole £120,000, and separately pays tax on the £27,000 it received. Worked through properly, the grant is genuinely worth £21,870 after tax rather than its full £27,000 face value, which is still a strong outcome for a training budget, just not quite the number on the offer letter. Above £50,000 of profit, where marginal relief tapers the rate up towards 25% on the slice between £50,000 and £250,000, the tax on the grant itself would be higher and the net-of-tax value correspondingly lower.
What it means for a Northern Ireland employer specifically
If you are planning a training programme with Invest NI, council or PEACEPLUS support behind part of the cost, budget on the grant landing in your accounts as income, not as a reduction to the invoice you record. Your accountant should be treating it as a trading receipt in the same accounting period as the linked training spend, not holding it outside the profit and loss account as if it were a capital contribution. And because the whole spend, grant-funded or not, is a normal deductible cost, there is no equivalent here to the £1,000,000 Annual Investment Allowance cap that limits equipment relief — a training budget of any size gets full relief in the year it is incurred, subject to it being wholly and exclusively for the trade.
One further wrinkle worth flagging for owner-directors specifically: training that upskills existing staff, including yourself as a director, in your existing trade is deductible. HMRC draws a harder line around training that gives a sole trader or director a genuinely new qualification or trade, which it can treat as capital and non-deductible. Encirc's programme, covering leadership, engineering and digital skills for an existing manufacturing workforce, sits squarely on the deductible side of that line; a self-employed owner retraining into an unrelated profession would not.
What to do this week
If you are weighing up a staff development plan, look at Invest NI's Training Support and Leadership and Capability Development pages for current eligibility, since Invest NI assesses funding rates individually rather than publishing a fixed percentage. Before you accept an offer letter, ask your accountant to confirm which accounting period the grant will be recognised in, since that is what determines the year your extra tax liability falls due, not the year the training itself runs.
If training spend is already a recurring cost in your business, check it is being claimed in full against this year's profit rather than spread out, using our management accounts service to keep grant income and the spend it funds visible together, month by month, rather than reconciled only once at year end. For the equipment-grant version of this same netting-off question, see our related piece on what happened to Boatyard Distillery's capital allowances after its Invest NI grant, and on how much of a headline Invest NI figure actually reaches the business in the Derry jobs announcement.
What is still uncertain, and when we'll know
Invest NI's release gives the total spend as "more than £700,000" rather than a published exact figure, and does not state whether the £157,200 is paid as a single sum or released in stages against the three-year training plan, which determines which accounting period the grant income actually falls into. It also does not break down how the spend splits across the four skills areas named. Encirc has not yet filed accounts covering this investment at Companies House, so there is no independent confirmation beyond Invest NI's own release of how the money moves through the business. What is fixed and checkable now: the £157,200 support figure, the general trading-receipt treatment of revenue grants under BIM40451, and the 19% small profits rate and marginal relief taper for 2026/27, confirmed unchanged with no Budget date yet set that could move them again.
Getting the tax treatment of a grant-funded training plan right before the accounts are drafted, not after, is exactly the kind of thing our tax planning service is built for, and our management accounts service keeps the real, grant-adjusted cost of a training budget visible every month rather than a surprise at year end.