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Claiming Tax Relief on Professional Subscriptions

If you pay professional fees and subscriptions in relation to annual membership of a professional body or organisation are you claiming tax relief on the cost of maintaining this membership? If not then you are potentially paying more tax than you need to.

Whether you are employed or self employed your tax bill could be reduced by claiming relief on any payments made for professional fees and subscriptions. When we talk about professional fees or subscriptions we mean if you have registered, obtained a licence or become a member of the organisation in question because it's necessary to your work and the organisation is approved by HM Revenue & Customs (HMRC). For example, if you are a medical professional you may be required to maintain a membership with the British Medical Association (BMA). As the BMA are on HMRC’s approved list the annual membership fees would qualify as a tax deductible expense.

Is my professional body or organisation on the approved list?

Each year HMRC publish a list of professional bodies or organisations that they accept are employment related and that subscriptions to those organisations should be deductible for tax purposes. This list is published on the HMRC website at http://www.hmrc.gov.uk/list3/index.htm

How do I obtain relief for my professional subscriptions?

If the professional body or organisation is on HMRC’s approved list then they will permit you to offset the membership fee or subscription against your income when calculating your tax bill. In order to claim relief you actually need to contact HMRC to make a claim for the tax relief. Generally this would be given by way of an additional allowance in your PAYE code, used by your employer when calculating your monthly pay.

If you complete a Self Assessment Tax Return then you would normally include a claim for relief in relation to your professional fees and subscriptions in your Tax Return by entering them at box 19 of your Tax Return. If you do not complete a Tax Return the best way to make a claim is either to contact HMRC by telephone or in writing / by completing a form P87 (‘Tax relief for expenses of employment’) and HMRC will ensure the additional allowances are entered in your PAYE code.

I’ve never claimed Tax relief on subscriptions, what about previous years?

If you have paid professional fees or subscriptions over a number of years but have never claimed tax relief then you can potentially claim tax relief now for the current tax year and the previous four tax years (provided you paid professional subscriptions in all these years to approved bodies).

What if my professional body or organisation isn’t on the approved list?

If your professional body or organisation isn’t on the approved list then unfortunately this means that HMRC do not consider that subscriptions to those bodies are incurred in the course of your employment. As a result they won’t allow any claim to tax relief in respect of those subscriptions if you are an employee.

What if my employer pays for my subscriptions?

If your employer has paid for your professional subscriptions on your behalf and has agreed a dispensation with HMRC then they won’t report these subscriptions on your P11D. As a result you are not taxed on the cost of your employer paying this for you so you cannot claim a deduction for the relevant amount.

However, if your employer pays the professional subscription for you but then reports it on a P11D form at the end of the tax year you can claim an expense of the same amount in order to negate the taxable benefit arising.

What if I am self employed?

The self employed then you are subject to slightly different rules from employees and in some cases you may be able to claim tax relief on professional fees or subscriptions paid to bodies that are not on HMRC’s approved list. For this to be possible you will have to be able to show that the fees or subscriptions were incurred wholly and exclusively for business purposes.

The method of claiming the tax relief is also slightly different in that any professional fees or subscriptions would normally be included as a deduction in your accounts each year. As such, a claim for tax relief would flow automatically when these figures are entered on your Tax Return unless you had any reason to disallow these costs for tax purposes.

Do you need assistance with making a claim?

If you need assistance with making a claim for tax relief in respect of professional fees or subscriptions paid feel free to give us a call today or email us at mail@johnmtaylor.co.uk and we shall be happy to help.

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