Are Union Fees Tax Deductible?
By
HuutiMoney
If you are wondering whether or not union fees are tax deductible, you will find the answer to your question in the following blog post; along with detailed guidance on the rules that govern such matters.
Are Union Fees Tax Deductible?
No, union fees are not tax deductible. As per Section 336 ITEPA 2003, any subscription made to trade unions or any other comparable bodies is not tax deductible; even if membership is required by an employer.
However, for a claimant to be able to get tax relief on union fees, the following conditions should be met:
- the union must be approved by the HMRC
- the payment must be made by the employee
- it is a professional membership fee that needs to be paid for an employee to be able to do their job
- the union/professional body is relevant to one’s job
On the other hand, if the union fees being paid fall under any of these two categories, tax relief will not be applicable:
- payment for a lifetime membership is paid to a union
- payment is made to the union by an employer (not an employee)
- payment is made to a union/professional body not approved by HMRC
If you wish to confirm whether or not the professional body that you are paying your union fees to is approved by HMRC, you can review the list of approved professional organisations and learned societies posted on the HMRC website.
How Can You Claim Tax Relief On Union Fees?
You would need to use form P87 to claim tax relief for expenses of employment such as union fees. You can do this by accessing your Government Gateway account.
When you file the claim, you will need a record of payments made, therefore, it is advisable to save such records. Additionally, if your employer has made any payments on your behalf (even if these are partial payments), you will need to deduct them from the amount you claim.
However, you need to make sure that:
- you are filing a claim for yourself and not for someone else
- the expenses you are claiming are not more than £2,500
- the claim is not for more than 5 different jobs
Once you file your claim, you will be assigned a reference number which you can use to track your progress online.
You will find step-by-step advice on how to file your claim from the guidance notes for form P87.
Can You Claim Tax Back On Union Fees?
Yes, you can claim tax back or apply for a tax rebate if you have paid union fees (or any other professional subscription to an HMRC-approved body). This amount can be reclaimed for payments made as far back as 4 years in the past.
In addition to reclaiming a tax rebate on an industry-related union fee, you can also apply for a change in your tax code so that you pay a reduced amount of tax in the future.
However, this is only possible under the following conditions:
- The claimant is a member of a professional union for their industry.
- HMRC has approved the union of which they are a member.
Your employer will be able to guide you on how much you can claim back.
Conclusion:
The above discussion helps to conclude that union fees are tax deductible as long as the claimant meets the eligibility criteria and the professional body that they pay the fee is approved by HMRC.
References:
Claim tax relief for your job expenses: Professional fees and subscriptions – GOV.UK