Paying Tax on Professional membership fees

pobrob

Hi I am currently a member of two professional bodies. I pay the subscription fees myself and them claim them back from the company as expenses. (total £390)

I recently recieved an updated tax code and see that my personal allowance has been reduced by the £390.

Is this correct? I have read posts on here and see that if you pay your own subs and don't claim them back you get a tax refund on theses expenses but can not see any post that cover my situation.

Can anybody help?

Thanks

ceeforcat

The expenses are personal to you, I would assume and I would also presume that your employer has advised the HMRC of the payment to you on a P11D or P9D which is correct. You have received the benefit of payment of your professional subscriptions at no cost to you whatsoever and cannot, therefore, claim tax relief on Nil cost. Those who pay their own subs will only gain tax relief on the payment and will still be out of pocket on the remainder.

pobrob

Yes my subs were identified on the p11d. So you are saying that the payment of subs is a benefit to me and hence I should pay tax on them.

Thanks for your responce.

ceeforcat

Yes because, in reality, you did not pay what was a personal expense - your employer did! If they were, for example, £400 your tax would increase by £80 if you are a basic rate taxpayer - your total outlay is £80. You are much better off than if you had paid the fees and received tax relief where your net outlay would be £400 less tax relief £80 = £320.

pobrob

OK I understand. Thanks for your help!

MsHoarder

I'm suprised at this, I am a member of a professional body (directly connected to my profession) which my employer wouldn't pay due to training and development cutbacks. HMRC sent me a form to claim back the tax paid on the subscriptions for the years my employer didn't pay them. See http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/IncomeTax/Taxallowancesandreliefs/DG_078381

ceeforcat

That is correct - you paid them and were entitled to the tax relief as I stated.

The op did not pay the subscriptions.

See post 2 above.

jimmo

ceeforcat wrote: »

Yes because, in reality, you did not pay what was a personal expense - your employer did! If they were, for example, £400 your tax would increase by £80 if you are a basic rate taxpayer - your total outlay is £80. You are much better off than if you had paid the fees and received tax relief where your net outlay would be £400 less tax relief £80 = £320.

Sorry to be picky but have you got this right?
If the professional fees are approved they will be on list3
http://www.hmrc.gov.uk/list3/index.htm
If so, the benefit of the employer paying them will be offset by the individual claim for deduction.
In this case the code should either include £390 as allowable expenses and a benefit deduction of £390, or it should contain neither.

dori2o

jimmo wrote: »

Sorry to be picky but have you got this right?
If the professional fees are approved they will be on list3
http://www.hmrc.gov.uk/list3/index.htm
If so, the benefit of the employer paying them will be offset by the individual claim for deduction.
In this case the code should either include £390 as allowable expenses and a benefit deduction of £390, or it should contain neither.

There is no expense.The taxpayer has not suffered any kind of loss in paying for the subscription.

See here from the notes contained in list 3

What is allowable
A statutory fee or contribution shown in the list is allowable where employees
* pay this out of their earnings from an employment
and
*are required to pay this as a statutory condition of following their employment.

An annual subscription to a body shown in the list as approved by HMRC is allowable where
*employees pay this out of their earnings from an employment
and
*the activities of the body are directly relevant to the employment.

The activities of a body are directly relevant to an employment where the performance of the duties of that employment
*is directly affected by the knowledge concerned
or
*involves the exercise of the profession concerned.

jimmo

Yes, but benefits count as earningshttp://www.hmrc.gov.uk/manuals/eimanual/EIM20005.htm
So, if this were the only benefit his employment income would be earnings plus benefits of £390.
Therefore he has paid his professional subscriptions out of his employment income and is entitled to a deduction.

jimmo

Perhaps this make my point better.
http://www.hmrc.gov.uk/manuals/eimanual/EIM20607.htm