HMRC publishes and periodically updates a list of ‘approved’ professional bodies, annual subscriptions to which will attract tax relief. These subscriptions may therefore be paid by employers without attracting a tax or NIC charge (though formal HMRC dispensation is needed before such payments may be excluded from employer’s forms P11D).
An updated version of this HMRC ‘List 3’ was published recently. (Tip: even those as long in the tooth as ET4B can’t remember what ‘List 1’ or ‘List 2’ used to be, so don’t bother searching!).
It is interesting that the covering text includes an HMRC comment that you can’t claim tax back on fees or subscriptions you’ve paid to professional organisations if these are not approved by HM Revenue and Customs, however don’t let that necessarily put you off! Certainly subscriptions that are deemed to have a dual business/private purpose would fail the ‘wholly exclusively and necessarily’ employee expenses deduction test. This was found to be so in the 1960s tax case of Brown v Bullock; here a bank manager was required by his employer to join a West End club in order to foster business contacts, however some of the benefits of the club were deemed to be at least partly private. The case also underlined the principle that the duties of the job, not simply the arbitrary wishes of the employer, must objectively make the expense a ‘necessary’ one.
However the more favourable case of Elwood v Utitz found that a club subscription, which gave the employee access to reduced business accommodation etc. rates, and provided nothing other than incidental private benefits, was allowable. Thus many subscriptions, although not directly identified as allowable under List 3, could be deductible if there is a direct business motive, and no private element.
In the case of Fitzpatrick v CIR, HMRC achieved some success in challenging the deductibility of newspapers purchased by journalists. The situation here could be said to be analogous to an employee paying for their own training to improve their CV – the purchase of the newspapers being considered to prepare the employees themselves for their future duties (rather than in the actual performance of their duties). However if the newspapers purchased had been more directly related to the journalists’ current actual duties (and objectively met the standard necessary test), then a different outcome may have been achieved.