I've just been through a lengthy discussion (or more accurately an argument) with HMRC about this. After about 18 months of letters backwards and forwards, I've just dropped my appeal and admitted defeat to the horrible little bleeders.
Basic story was...
At my previous employer I had a "Training Agreement" which meant I paid back £9000 for the training, by way of a few hundred quid taken out of my salary each month until it was all paid off. I left before it was finished so they withheld my last pay check and I had to pay back the remaining balance in one lump. Called HMRC to ask if it was possible to claim the tax back, they said yes, so I did and was promptly given just under £2000. Was very happy and celebrated in good style!
About 6 months later they wrote saying they were going to enquire into this claim. We argued back and forth for over a year on many issues, which I won't bore you with the details of now, but unsurprisingly they concluded it wasn't an allowable expense. I appealed against the decision, but have since seen a commissioner's report of a recent case of 2 pilots' battle on a similar front, which they lost unfortunately, and have dropped the appeal and paid them back the money (plus their healthy level of interest!!). Although their case was slightly different to mine (theirs was a bond, mine was not - I had to pay it back whether I stayed or left) the various conclusions in it were also relevant to my case, and it was fairly clear to me that if my case was also taken this far it would get the same result.
I checked with the legal man at Balpa who represented them before I gave in, to check I was doing the right thing, and although not terribly helpful he did seem to think I wouldn't win, so not worth proceeding with it.
All very disappointing in the end then. Had to give them back well over £2000, which was obviously a kick in the nuts to say the least. The whole thing has left me with even less respect (if that was possible) for the Tax Man. Not because of the outcome necessarily, if that's the rules then fair enough (even if it seems unfair to me), but because of the attitude and (lack of) intelligence of the person at HMRC who was dealing with my case. She was utterly incompetent in my view, totally unwilling or unable to understand what I was telling her - we just went round in circles for about 6 months arguing the same few points. At one point I even wrote to ask that the case be handed to her superior in the hope that it might find its way into the hands of someone with even an ounce of intelligence or common sense about them. Predictably that came to nothing too.
Anyway, sorry to have bored you aces low, but hope it's been useful to you. The upshot of my case was that it's not an allowable claim unfortunately. If you decide to claim anyway, best of luck and let me know what the outcome is - I might just put the claim in again if you find a way of succeeding!
Cheers