Professional Fees Tax Relief Guide

If you are in a profession where you must pay a subscription or a professional fee, it is highly likely that you are entitled to tax relief.

You can claim a tax rebate for professional fees for many industry bodies backdated for up to four tax years; in most cases you should get a new tax code which means a reduction in future years too.

HMRC expects you to make a claim for professional fees and any other work related expenses by using their online or offline tax rebate claim process.

Taxpayers who don’t make a claim to HMRC won’t have their professional fees entitlement repaid automatically so it’s vital that you understand what you can claim for and the timescales involved.

The professional fees tax relief guide will let you know what you are entitled to and how to claim it back directly from HMRC.

What professional fees can I claim tax relief for?

For some job roles it is essential that you have professional registration and / or a special licence that allows you to legally practice your profession.

Where not mandatory, it might be beneficial to voluntarily become a member of a professional body (you can claim tax back on union fees too).

Regardless of whether membership is mandatory or optional, you are likely to need to pay an annual fee for membership and for this you may be entitled to subscriptions tax relief.

You can claim tax relief on professional fees:

1. if you require professional membership or a license for your job, or choose to enter a voluntary organisation for job-related benefits; and
2. the organisation is approved by HMRC for subscriptions tax relief.

Exceptions to profeesional fees relief

HMRC does not offer tax rebate on professional fees as a matter of course. Not all organisations are approved by HMRC.

You can use our professional fees directory to see if your professional body is eligible. HMRC applies the following exemptions to claiming professional fees tax relief:

1. You’ve opted for a lifetime membership on your subscription.
2. When the employer is paying for your professional fees.

How much is professional fees tax relief worth?

What you can claim back is all dependent on the agreement between the professional body or Union and HMRC.

Each organisation or Union has separately determined the percentage of membership fees eligible for relief, with some offering relief on a partial amount and others permitting tax relief on the entire fee.

If you are a basic rate taxpayer you will receive 20% tax relief on the allowable professional fee and this increases to 40% and 45% for higher and additional rate taxpayers respectively.

How can I claim for my professional fees from HMRC?

To claim for your professional fees for the first time you should complete a form P87 or a self assessment tax return if you complete one.

HMRC expects you to complete a P87 form if you don’t already complete a self assessment tax return.

A P87 is specifically for expenses of employment and it gives you the option to claim back professional fees relief for up to the last four tax years on the same form.

If you incur other expenses of employment you should include these on the same P87 form so HMRC can calculate what you are owed back for everything at the same time.

You can download the form and post it or you can submit it online which is usually the quickest way to complete the process.

If you have claimed for your professional fees in the past you can call HMRC and they should be able to update your record with any changes and adjust your tax code to reflect your current professional fee tax relief.

Professional fees P800 tax calculation

HMRC will send you a P800 tax calculation to confirm the value of any overpaid income tax due to a claim for professional fees.

A P800 tax calculation will explain the figures involved in each tax year of your claim showing how much tax relief you have been given and the professional fees allowed.

The P800 will tell you how any refund will be repaid to you which is normally via a bank transfer online or by cheque.