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List 3 updated August 2017

Part 5 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA) allows for certain deductions to be made from taxable pay – i.e. to reach a figure called net taxable pay which is the pay on which income tax is calculated. This part includes things such as expenses for business travel.

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Sections 343 and 344 of ITEPA allow for professional membership fees and annual subscriptions to be provided free of tax and National Insurance where:


  • It is paid to a body that has HMRC approval, and
  • The activities of the body are of direct benefit to or concern the profession practiced in the performance of the duties of the employment.


The full list of professional bodies that have the necessary HMRC approval is published in a document known as ‘List 3’. This has been updated as of 11 August 2017, at which time nine new bodies were added and three were removed. Unfortunately, no details given as to what bodies these actually were.


List 3 is essential reading for the reward professional as the day-to-day professional impact of a body appearing on it are that:


  • Employers can reimburse fees and subscriptions without fear there will be a P11D implication and/or
  • Individuals can claim tax relief on the fee or subscription that they have paid (assuming that the employer has not actually reimbursed the fee or subscription).


The way in which tax relief is claimed depends on whether the amount is up to or over £2,500 over the course of the tax year.

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