If you’re a professional in the UK, you might be paying subscriptions or membership fees to certain professional bodies or trade unions. The good news is that HMRC allows tax relief on many of these payments, reducing your taxable income and ultimately your tax bill. However, understanding which fees qualify, how to claim relief, and ensuring you have the proper records is essential. This detailed guide will walk you through everything you need to know about claiming tax relief on professional subscriptions and union fees.
What Are Professional Subscriptions?
Professional subscriptions are payments you make to maintain membership in a professional organisation relevant to your job. These organisations often regulate your profession or help maintain standards within the industry. Examples include:
- Royal Institution of Chartered Surveyors (RICS)
- Chartered Institute of Management Accountants (CIMA)
- British Medical Association (BMA)
- Law Society of England and Wales
Membership in these bodies often supports your career development, ensures you stay up to date with industry developments, and may be a requirement for practicing your profession.
What Are Trade Union Fees?
Trade union fees are payments you make to belong to a trade union that represents your interests as an employee. These unions advocate on behalf of workers, negotiate collective agreements, and provide legal support. Examples include:
- Unite the Union
- GMB
- NASUWT (for teachers)
HMRC allows tax relief on certain trade union fees that are relevant to your employment.
Who Can Claim Tax Relief?
To qualify for tax relief:
- The subscription or fee must be paid personally by you (not reimbursed by your employer).
- The organisation must be on HMRC’s approved list of professional bodies and learned societies, published annually.
- The subscription must be relevant to your current employment and directly related to your work duties.
Subscriptions or fees paid for personal reasons, or to organisations not on the approved list, do not qualify.
How Much Can You Claim?
You can claim the full amount you paid for eligible subscriptions and fees. If you pay higher or additional rate tax, the relief is given at your highest marginal rate. For example, if you pay £300 per year for a qualifying subscription and you’re a basic rate taxpayer (20%), you’ll get £60 back in tax relief. If you’re a higher-rate taxpayer (40%), you’ll get £120 back.
Claiming Tax Relief on Professional Subscriptions
Here’s how to claim tax relief on professional subscriptions:
- Check the HMRC List: Ensure the organisation is on the approved list of professional bodies. You can find this list on the HMRC website.
- Calculate Your Expenses: Add up the total annual amount paid to eligible organisations.
- Complete the Claim: If you’re employed, you can claim relief using:
- The HMRC online service for tax relief on employment expenses (quick and simple).
- Form P87 (if your expenses are less than £2,500 per tax year).
- Your Self Assessment tax return (if you already complete one or if your expenses exceed £2,500).
HMRC will adjust your tax code to reflect the relief, meaning you pay less tax in future months.
Claiming Tax Relief on Union Fees
Only certain trade union subscriptions qualify for tax relief, usually when the union is approved by HMRC for representing workers in negotiations. The process is similar to claiming relief for professional subscriptions—check the HMRC list and use the online service, Form P87, or your Self Assessment tax return to claim.
How to Use Form P87
Form P87 is the most common way to claim tax relief on employment expenses if you don’t usually complete a Self Assessment tax return. You’ll need to provide:
- Your personal details, including National Insurance number.
- Details of your employment (employer’s name and PAYE reference).
- The total amount of subscriptions or fees paid during the tax year.
You can submit Form P87 online or by post. HMRC will adjust your tax code and refund any overpaid tax through your salary or directly to your bank account.
Record-Keeping Requirements
You should keep evidence of payments, such as receipts or bank statements, for at least 22 months after the end of the tax year. If you file a Self Assessment tax return, keep records for at least five years. HMRC may request this evidence to support your claim.
Practical Example
Consider Alex, an architect who pays £450 per year to the Royal Institute of British Architects (RIBA). RIBA is on HMRC’s approved list. Alex earns £55,000 per year, putting him in the higher-rate tax band (40%). By claiming tax relief, Alex can reclaim £180 (£450 x 40%) in tax relief, effectively reducing the cost of his subscription to £270.
Common Mistakes to Avoid
- Claiming subscriptions reimbursed by your employer—only out-of-pocket payments qualify.
- Claiming for subscriptions to organisations not on the HMRC approved list.
- Forgetting to update your claim each year—claims do not automatically renew.
Benefits of Claiming Tax Relief
By claiming tax relief on professional subscriptions and union fees, you can:
- Reduce your taxable income and pay less tax.
- Effectively lower the cost of maintaining your professional standing.
- Maximise your take-home pay while continuing to meet your professional obligations.
Getting Professional Advice
If your situation is complex, or if you’re unsure about which subscriptions qualify, seek advice from a tax adviser or accountant. They can help you maximise your tax relief and ensure you remain compliant with HMRC regulations.
Conclusion
Tax relief on professional subscriptions and trade union fees is a valuable benefit that every eligible UK taxpayer should take advantage of. By understanding which fees qualify, keeping good records, and using the right method to claim, you can significantly reduce your tax bill. Whether you use HMRC’s online service, Form P87, or your Self Assessment tax return, claiming tax relief on these payments can help you keep more of your hard-earned money in your pocket.
