Professional fees and subscriptions

Produced by Tolley

The following Employment Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Professional fees and subscriptions
  • Tax and NIC treatment
  • Reporting the benefit ― employer
  • Reporting the benefit ― employee
  • Are the fees business-related?
  • Professional bodies listed in statute
  • Approved professional bodies
  • Fees to an HMRC-unapproved professional body
  • Claiming a deduction

Professional fees and subscriptions

Many employees are required to pay professional fees or subscriptions to trade bodies or institutes in order to carry out their jobs. An example of this might be solicitors who must pay for an annual practising certificate from the Solicitors Regulation Authority in order to practise.

In other cases, the professional fee or subscription may not be essential to the practice of the job, but may relate to the job. An example of this might be payment of subscription fees to the various accounting and tax professional bodies. Whilst you can still practise as a tax adviser or accountant without membership of such bodies, the subscription relates to the duties performed in the employment.

Many employers pay these fees on behalf of their employees. This is a taxable benefit, but they may be able to claim a deduction from their employment income depending on the circumstances (see below). If a deduction would be available to the employee, then the employer’s payment of the fee or subscription comes within the exemption for expenses which would otherwise be deductible. There are no tax, NIC or reporting implications (see the Expenses and benefits matched by allowable deductions guidance note).

In other cases, the reporting of the benefit of the fee depends on the payment arrangements.

Tax and NIC treatment

The tax treatment of these fees depends on whether or not:

  1. the fees are paid to a qualifying body (either under the statutory rules or the approved body list, see below), and

  2. the fees are paid or reimbursed by the employer (from 2016/17 onwards)

Reporting the benefit ― employer

The tax treatment can be summarised as follows:

Popular documents