I haven’t yet met a doctor who hasn’t paid for work-related tax-deductible expenses out of their own pocket. All well and good, except the vast majority of you forget to claim for those expenses and miss out on an admirable tax return.
So, what can you claim for and is it really worth all the hassle?
HMRC classify tax-deductible expenses as either ‘travelling you had to do in your job’ or ‘other expenses you had to pay in doing your job – and which related ONLY to doing your job.’
Unfortunately, HMRC doesn’t provide a definitive list so a bit of common sense has to prevail here.
Some of the more popular items are:
- Professional fees and subscriptions: BMA, GMC, MPS, Royal Societies…this list is long.
- Business mileage or fuel, excluding commuting to your normal place of work.
- Tools and specialist equipment such as theatre shoes, stethoscopes and so forth.
What about all those courses and exams I have paid for?
These can add up to a large sum. Previous to 2010 courses and exams were seen as career progression in the eyes of the HMRC. Due to a High Court Judgement, you are now able to claim for exams that are mandatory to your training contract. Some exams and courses can still be seen as career progression and the HMRC don’t always allow them. Sometimes there seems no rhyme or reason to what is and isn’t allowable.
During the Covid pandemic, GP trainees needed to take the new RCA instead of the usual CSA as it could be taken remotely. The HMRC does not include this exam on the approved list, therefore, meaning those forced to take the RCA this year will be out of pocket by thousands. So beware!
How do you claim your expenses?
Check out the HMRC site to see how to claim. Claim tax relief for your job expenses.
There is a simple form to complete for each tax year you want to claim in. LC Forms.
Or, if you’ve had a successful claim in the past and you want to listen to 5 minutes of recorded messages, you can phone them.
Anything over £2,500 and you will need to claim via self-assessment.
Here’s an example
If a Registrar claims for this years’ worth of BMA and GMC subscription, currently costing £866. This means that more of their income is untaxed, thus they receive tax relief at their highest rate. In this case, that’s likely to be 40%. So, £866 x 40% = £346 more income in their pay.
It gets better! If you haven’t claimed before then you can claim for expenses in previous years (although there is a limit). You must claim within 4 years of the end of the tax year that you spent the money.
You may need to scroll left and right if you’re viewing the table below on a small screen.
|Tax Year||Tax Year Ended On||You Must Claim By|
|2017-18||5 April 2018||5 April 2022|
|2018-19||5 April 2019||5 April 2023|
|2019-20||5 April 2020||5 April 2024|
|2020-21||5 April 2021||5 April 2025|
If this same Registrar had paid but not previously claimed for their BMA and GMC subscriptions in the previous tax years, they would be looking at 4 years’ worth of expenses. Assuming they had the same cost, for the sake of argument, as above for all 4 years, that’s 4 x £346 = £1,384.
That’s £1,384 for the time it takes to complete a simple form!
What are the drawbacks?
All doctors should be declaring any additional income that they receive. This needs to be added to your letter to the HMRC as earned income, although it will offset any expenses you are claiming for.
Is it worth using an account?
Because of the complexities of what you can and can’t claim for, it is advisable, in many instances, to engage the services of a good accountant or tax adviser. This is particularly so if you need to claim your expenses going back a number of years, or if you have private practice income or other incomes such as rental income.
Winston Churchill once said, “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty”. Why not grasp the opportunity and claim some money back from the taxman?
Will you be submitting your tax-deductible expenses this year? Let us know by adding a comment below.
Updated in December 2021
Legal & Medical Investments Ltd is authorised and regulated by the Financial Conduct Authority. The Financial Conduct Authority does not regulate tax advice. The tax reliefs referred to are those currently applying in the United Kingdom to UK Tax Residents. These tax reliefs are liable to change. The value of any tax relief available will depend upon the individual circumstances of the taxpayer.