As an employed doctor, what you can and can’t claim tax relief on for training and Continuing Professional Development (CPD) expenses is an area filled with confusion. The general rule regarding deductions for expenses states that the deduction is allowed where:
- The employee is obliged to incur and pay it as a holder of the employment; and
- The amount is incurred wholly, exclusively and necessarily in the performance of the duties of the employment.
A doctor is a member of a professional body which requires its members to engage in regular training or CPD to make sure that the doctor’s knowledge and skills are up to date. Consequently, it’s often assumed that if a person is required to undertake this training, any associated costs should be allowable for tax purposes. Unfortunately, it isn’t as simple as that.
In most cases, training costs incurred by an employee will not be allowable for tax. This is because tax relief can’t be claimed for an expense unless it’s incurred ‘in the performance of the duties of the office or employment’. The expense must be incurred in actually carrying out the duties of the job, not in preparing or training to carry out the duties.
There is, however, an exception to this rule. Tax relief may be claimed by an employee who’s in a training phase of their career, during which their attendance at external courses represents an intrinsic part of their duties of employment. The following conditions apply:
- There’s a mandatory requirement for the employee to undertake the external training as an intrinsic part of the duties of the employment.
- Failure to complete the training and gain the qualification will mean that the employee will not be able to continue in employment with the employer in the role that would otherwise have been available to them after qualification.
Therefore, doctors on training contracts undertaking training/exams will be able to claim tax relief on the courses and exam costs.
HMRC’s website contains a list here of medical courses and exams which can be claimed. The list isn’t exhaustive and may not cover all the courses that might qualify for tax relief.
You have four years to claim tax relief with HMRC on training expenses. This can be submitted via form P87, if under £2,500, or through self-assessment.
If you would like help with any of the issues discussed above, please get in touch with Jamie Butcher in our specialist Medical accounting team on Medics’ Money.
Jamie Butcher, Manager at Larking Gowen
This article is designed for the information of readers. Whilst every effort is made to ensure accuracy, information contained in this article may not be comprehensive and recipients should not act upon it without seeking professional advice. “Larking Gowen” is the trading name of Larking Gowen LLP, which is a limited liability partnership registered in England and Wales (LLP number OC419486). Where we use the word partner it refers to a member of Larking Gowen LLP. ©Larking Gowen.