Professional Fees - Social care workers added to the list of health professionals

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3 April 2008

Payment by an employer of an employee's professional membership fees is an employment-related benefit that is taxable under the Benefits Code. If an employee's membership fees are paid for by the employer, the costs must be reported on form P11D at the year end and are subject to Class 1A NICs. Under the provisions of section 343 of the Income Tax (Earnings and Pensions) Act 2003, the employees concerned may claim tax relief if

• the duties of the employment involve the practice of the profession to which the fee relates, and
  
  
• the registration, certification, licensing or other matter in respect of which the fee is payable is a condition, or one of alternative conditions, which must be met if that profession is to be practised in the performance of those duties.

By means of the Income Tax (Professional Fees) Order 2008, fees payable when social care workers in England, Wales, Scotland and Northern Ireland, apply to be included on registers maintained by the General Social Care Council, the Care Council for Wales, the Scottish Social Services Council and the Northern Ireland Social Care Council are added to the list of health professionals who may be entitled to claim tax relief.

Similarly, fees payable when a person applies for inclusion of a register maintained by the Animal Medicines Training Regulatory Authority is added to the list of animal health professionals.

An employer does not have to pay Class 1A NICs on the payment of professional fees if it is clear that the employee will be able to claim full tax relief. However, if an employer only ever pays the professional fees of their employees in circumstances where they always qualify for full tax relief, HMRC may issue a dispensation, thereby avoiding the need for the employer to report the benefit in the first place and for the employee to subsequently claim tax relief.

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Source:
The Income Tax (Professional Fees) Order 2008

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