I am an employee, but I pay my own professional subscriptions. Is there any way of claiming these costs back and reducing my tax bill?

Whilst most tax matters for employees are dealt with through the PAYE system, there are some reliefs that fall outside that. One of these areas is professional subscription payments. It is possible to claim professional subscriptions as a deduction from taxable income, which will lower the amount of tax due. 

To be able to claim back the cost of subscriptions, they must meet the following criteria

• They are on HMRC’s list of approved organisations. This list of organisations can be found here. (tinyurl.com/HMRCApproved)

• The membership must be relevant to your employment. 

• It must be a regular subscription. Lifetime subscriptions cannot be claimed in this way. 

• The employee must have paid for it themselves. If an employer pays your professional subscriptions then they get the tax benefit, not the employee.

If you already complete a tax return then the claim for the subscriptions can be made on the employment pages of that return. If you do not complete a return you can claim by phone as long as you are claiming for less than 5 different jobs and the total claimed is no more than £2,500. Phone claims are made on the general enquiries line, 0300 200 3300. It is also possible to make a claim of any size online if you have a Government Gateway account, or by completing and posting form P87, which can be found here. (tinyurl.com/FormP87)

There may be other employment related expenses, such as uniform costs or mileage allowances, that you can claim in a similar way.

I have had a clear-out and started taking items to boot sales to sell. I have managed to raise a few hundred pounds over the course of a few weeks. Will I have to register to complete a tax return and declare this income?

When an individual engages in an activity with the view to making a profit, this is usually considered to be self-employment. The general rule is that self-employed people have to register with HMRC and complete a tax return to report their self-employed income. However, there are two main exceptions to this. 

The first is that you are not genuinely engaged in an activity with a view to making a profit. Simply selling unwanted items is aiming to recoup something from their original cost, so a profit is not genuinely being made. Were you to find yourself successful in selling at boot sales and start seeking items from other sources to sell, then the activity will become registerable trading activity. The same rule applies where someone has a hobby that just happens to generate some income. The flip side of this rule is that you cannot claim the associated expenses either. This means that if you make a loss from these activities you will not be able to deduct that loss from your other income for tax purposes. 

The second exception is where your income from this activity is low. If income from an individual trade is below £1,000, then this also does not require registration. This is still the case, even if the activity is intended to make profits but has simply not become successful yet. Once income goes above £1,000 in any given tax year, you will be required to register and complete a tax return. However, in completing those tax returns, you can opt to deduct this £1,000 allowance from your income instead of calculating all your actual expenses. This can make things simpler for a trader whose business activities are still very small-scale. 

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