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List 3 updated

The full list of professional bodies that have the necessary HMRC approval to allow for professional membership fees and annual subscriptions to be provided free of tax and National Insurance has been updated.

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Part 5 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA) allows for certain deductions to be made from taxable pay – i.e. before net taxable pay is calculated on which the individual is subject to income tax.

 

This includes things such as business travel and expenses reimbursement. 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 practised 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 at April 2017 and the guidance is now easier to use and navigate through.

 

The practical day-to-day effect of a body appearing on List 3 is that:

 

  • Employers can reimburse fees and subscriptions without fear that there will be a P11D implication and/or
  • Individuals can claim tax relief, assuming that the employer has not 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.
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