The cost of professional subscriptions incurred by doctors can really add up – our GMC fees, Royal College fees, examination expenses and MPS fees can all add up, especially in a cost-of-living crisis that affects us all. But you can reduce the cost of these professional subscriptions by up to 45% (48% in Scotland) by claiming a tax rebate. In this article we consider what and how you can claim.
How does tax for doctors work?
Firstly it is important to understand how tax for doctors works [link to Income Tax for Doctors” article]. The first thing you need to know about the UK tax system is that, rather than being a calendar year, the UK tax year runs from 6 April in any given year to the following 5 April. The current tax year runs from 6 April 2024 to 5 April 2025.
What are the current tax rates on our salaries? Firstly, most people in the UK, including doctors, will receive a personal allowance each year. This is the amount of income that you can receive tax-free. Currently, in the UK, the tax-free amount is £12,570 and this has been frozen until 6 April 2028.
After this threshold is surpassed, you start to progress through the income tax rates which for employment income (aside from Scotland – see below) are set at 20%, then 40%, then 45%. These thresholds are:
Personal Allowance: up to £12,570 tax free
Basic rate: £12,570 to £50,270 taxed at 20%
Higher rate: £50,271 to £125,140 taxed at 40%
Additional rate: Over £125,140 taxed at 45%
Since you have to earn over £125,140 for the first 45% rate to apply, most doctors will pay tax on their salary at the basic rate of 20% for the first chunk of income above the personal allowance, and then 40% after that.
Things are slightly more complicated in Scotland, where there are more income tax rates and income tax brackets. There are six income tax rates after the personal allowance in Scotland: 19%, 20%, 21%, 42%, 45% and 48%.
| Income tax rate | Income tax band |
|---|
| Personal allowance (if applicable) – 0% | £0 - £12,570 |
| Scottish starter rate – 19% | £12,571 – £14,876 |
| Scottish basic rate – 20% | £14,877 - £26,561 |
| Scottish intermediate rate – 21% | £26,562 - £43,662 |
| Scottish higher rate – 42% | £43,663 - £75,000 |
| Scottish advanced rate – 45% | £75,001 - £125,140 |
| Scottish top rate – 48% | £125,141+ |
Most doctors in Scotland will be in the 42% income tax bracket while in the rest of the UK this is 40%. This means that most doctors can save up to 40% (or 42% for Scotland) of any expense that they are allowed to claim income tax back on. So a £100 expense could save a doctor £40 in tax back in England, or £42 in Scotland currently.
What employment expenses can you claim against tax?
Expenses that are tax deductible against employment income, that is your salary as a doctor, fall into five main categories. But the key one for us is ‘professional fees or subscriptions paid to an organisation approved by HMRC’ (the other important category is ‘any payment by an employee to an occupational pension scheme’ such as the NHS pension scheme – your NHS pension contributions automatically get tax relief).
HMRC has a list of approved organisations called ‘List 3’, and if you pay a subscription fee to one of these you are entitled to a tax deduction against your employment earnings.
These include:
- Your MPS fee
- Your GMC fee, including any CCT fees
- Your Royal College fees
- Your BMA fee
You can go to HMRC’s list and look up organisations. However, the list is not very well written. For example, at the time of writing, the General Medical Council can be found under ‘M’ for Medical Council General. Our free tax rebate guide gives more information and you can download it here https://www.medicsmoney.co.uk/free-guide/
You don’t need receipts to claim if you know the amounts you paid, but HMRC may ask you for them in the unlikely event that they query your claim.
Can you claim exam fees?
HMRC always used to argue that exam fees weren’t tax deductible. However, in 2010, HMRC lost a court case regarding this subject and because of it doctors can claim for certain exams and also any resits. If you’re a junior doctor on a training contract and training is an intrinsic contractual duty then you should be able to claim a tax deduction against your employment income.
You may be able to claim for associated costs of the exam as well such as train fare to the exam or accommodation if necessary. Unfortunately, revision courses are not allowable expenses.
What can I not make a tax claim for?
Anything that is not specifically allowed must meet some very strict criteria and so most expenses are not tax deductible. The rule is that for an expense to be allowable it must be “wholly, exclusively, and necessarily in the performance of the employee’s duties”. This is such a tough rule to meet that the following are not usually tax-deductible:
- Training costs that are not an intrinsic part of a training contract
- Continuing Professional Development
- ALS/PLS/ NLS/ATLS courses
- Diploma costs
HMRC will argue that these make you a better doctor and are not ‘necessary’ or they will argue that you incurred the expense but not while performing your duties as a doctor. You also cannot claim for any expenses that your employer reimburses you for.
What years can I claim for?
You can claim for the previous FOUR tax years with a tax year running from 6 April to 5 April the following year. You can also make a claim for the current tax year that we are in. So, if you make the claim in November 2024 you can claim for:
- The tax year 6 April 2020 to 5 April 2021
- The tax year 6 April 2021 to 5 April 2022
- The tax year 6 April 2022 to 5 April 2023
- The tax year 6 April 2023 to 5 April 2024
- The current tax year 6 April 2024 to 5 April 2025. You may wish to hold off until the tax year ends however.
An expense should be claimed in the tax year in which it is incurred. If you pay in instalments, still make the claim in the tax year the instalment was paid. For example, if you paid £200 in March 2024 and £250 in May 2024 for an exam in June 2024 you would claim £200 in the 2023/24 tax year and £250 in the 2024/2025 tax year.
If you have any unclaimed expenses for the tax year 6 April 2020 to 5 April 2021 you only have until 5 April 2025 to make a claim for those expenses.
How do I make a claim today?
The quickest and easiest way is to claim online via something called the Personal Tax Account. Every taxpayer can set one of these up. Here at Medics’ Money, we are passionate that everyone sets up a Personal Tax Account, which also has a lot of useful information contained within it. For instance, it tells you what HMRC thinks your estimated income tax bill is and it tells you your tax code.
For help setting up a Personal Tax Account, this can be found in our free guide: https://www.medicsmoney.co.uk/free-guide/
Once you have set up the Personal Tax Account, you can use the Medics’ Money free step-by-step guide in the link above to help you make your claim. It’s the quickest and easiest way to do this, and it’s completely free.
Are there any exceptions as to who can use the Personal Tax Account? Anyone who already has to complete a tax return should make their claim on their tax return rather than via the Personal Tax Account. Also, if you incur more than £2,500 of allowable expenses in any tax year, you will have to complete a tax return for that tax year. So if I claim for four tax years and in one of those I incur more than £2,500 of expenses I can use the Personal Tax Account for three years but will need to complete a tax return for the tax year where the expenses exceed £2,500.
Conclusion
You can claim the tax back on your MPS fee, GMC fee, Royal College fees and any examination expenses if they were incurred under a junior doctor training contract for the past four tax years and the current tax year – this should then result in you getting a tax rebate on up to 45% of the cost (or 48% in Scotland). Most doctors don’t need an accountant to help with this – you can use the Medics’ Money free, step-by-step, guide to make that claim: https://www.medicsmoney.co.uk/free-guide/