If you are a member of a professional body or organisation, and have paid subscription fees for annual membership, you may be able to claim tax relief on the cost of that membership.
Many employed and self-employed people are required, either as a legal obligation or practical necessity, to invest significantly in different types of professional subscriptions.
These could include membership fees for professional organisations, subscriptions to industry-specific publications, licence registrations or training courses that are relevant to your work.
How Do Tax Reliefs for Professional Subscriptions Work?
As these types of expenses are seen as an essential outlay needed to operate your business, perform the function of your job or support your career development, HMRC offers a degree of tax-relief. Provided they are the approved list of organisations.
For example, if you are a farmer and are required to maintain a membership with the Royal Agricultural Society of England (RASE), the annual membership fees would count as tax deductible as the RASE is on HMRC's approved list.
Or if, like our accountants at Crunch, you’re a member of the Certified Accountants Chartered Association of (ACCA) (now called the Association of Chartered Certified Accountants), you could also claim tax-relief. As this certification is a must for accountants to gain recognised training and competency, and is generally expected by employers.
The list is extremely long, and it contains organisations from across every sector. So the chances are that if you have some kind of subscription related expense you will be able to claim tax-relief for it. But ensure to check the list before you do so.
Are You Missing Out?
A very recent report just published in April 2023, in the Journal of Professions and Organization, found that revenue for professional associations and regulatory bodies in the UK increased by 28% over the decade 2010–2022. Indicating strongly that activities performed, and collection of contributions, by these types of organisations has jumped dramatically.
As the report mentions, this reason for this could potentially be due to the highly widespread introduction of ‘Continuing Professional Development’ or CPD.
A compliance policy of membership organisations that mandates a greater level of participation from its members. Who are encouraged to or required to attend training events, pass ongoing exams and be involved with skill and knowledge sharing, etc.
The cost of subscription to these types of membership or training organisations can seriously add up, especially for self-employed people who don’t typically have access to funding from an employer. However in many cases they are an unavoidable expense for sole-traders or company owners.
Make Sure Claim What You're Entitled To
If you're a chartered surveyor, for example, and you want to add credibility to your practice, it’s more or less a requirement to be a member of the Royal Institute of Chartered Surveyors (RICS). As this is an expectation held by most employers, contractors and clients in the industry.
And if you want to reach the upper levels of career development and earning potential, then accreditation from this membership-body is an absolute necessity. As RICS is the institute that upholds and regulates standards of the chartered surveying industry.
Furthermore, as with many high-end trades and professions, obtaining the required accreditation, licensing or training isn’t a one-time event. There are different levels of certification you need to reach, each one usually being dependent on, and unlocked by, achieving lower level certificates first.
So as you can imagine, when we consider that there are hundreds, if not thousands, of these types of membership and subscriptions across different industries, it’s not uncommon for skilled professionals to find themselves facing mounting expenses.
That's why it's important to take advantage of any and all tax relief options available to you. And the area of professional fees and subscriptions is often overlooked.
Check That Your Subscription Qualifies
As per the guidelines of HMRC, you can claim tax relief on fees or subscriptions paid to professional organisations that are recognised by HMRC. However, to be eligible for this, the membership fee must be necessary for you to carry out your job or it must be helpful in enhancing your work skills.
It is important to note that you cannot claim tax relief on fees paid to organisations that are not on the approved list of HMRC. Additionally, if your employer has already paid for the membership fee, you cannot claim tax relief on it.
Furthermore you’ll need to keep a record of all the fees and subscriptions paid and the dates they were paid, as you will need to provide this information when making a claim for tax relief.
How Much Can You Claim?
HMRC has a specific rate agreed with each different organisation on its approved list.
So the amount of tax relief you can claim back is dependent on the agreement that your organisation has arranged with them.
Hence, it is not possible to provide an accurate estimate on how much tax you could claim back without knowing the specific arrangements made by your organisation.
To find out more information on the tax relief you may be entitled to, it is best to check with your organisation, or consult with a tax professional. Our advisors can help you with this.
How to Claim
*You can backdate your claim
You can claim relief for professional subscriptions for this current year as well as the last four years. When you complete your claim you simply need to supply records of past payments in the form receipts.
Claiming tax-relief for professional fees as a self-employed individual is part of your self-assessed tax return. You need to enter the amount of your subscription, and the years you want to claim for in box 19 on the SA102 form.
If you’re a self-employed individual, sole-trader or a Ltd company owner, you can save mountains of time and take all the stress out of claiming for expenses with Crunch’s online self-assessment system or accounting software.
If you are an employee on the PAYE system and want to claim back the cost of your professional subscription, you can make your tax-relief claim online via the HMRC website.
Scroll down to the bottom of the page and click the green ‘start-now’ button. There’s a brief questionnaire to complete then, if you’re eligible, you’ll be able to begin your claim. In which you will be asked to create a government Gateway ID if you don’t already have one.
It also works more efficiently if you have your National Insurance number and a recent payslip, P60 or a valid UK passport to hand.
After you’ve made your first claim your PAYE tax code should change, and the tax relief will be applied to your future monthly salary.
The tax-reliefs available for professional subscriptions are an often neglected opportunity to save funds and add extra income to your salary or revenue to your business. With many employed and self-employed people being unaware of their entitlement. However, it’s important to gain a grasp on the way HMRC treats these expenses, in order to claim back profit you would otherwise lose for investments that are essential to operate your business or develop your career.
To learn more about tax, expenses and other savings that you may be missing out on, speak to Crunch’s experts today for free advice.