Employees self assessed expenses

[Brown and Boris]

My daughter is a junior doctor. I was talking to her this week about the cost of attending a number of courses, paying examination fees and a host of other costs she incurs associated with her job. She is fairly ambitious and has taken FRCA exams at her own cost, goes to emergency medicine conferences, attends pre-exam refresher/crammer courses and this month is flying to Portgugal to sit an EU emergency medicine exam, again at her own cost. All of thenm incur hotel costs, travel costs, books and web site subscriptions. She must have spent £5K on this in the last year or so.

It seems the Trust/Deanery, although obviously welcoming the qualfications nad skills she is getting don't see these examinations and courses are a 'job necessity' at this stage in her career and therefore won't pay the costs.

I would have thought that she could claim some of these costs against her self assessed tax return, on the basis that if he is ever to climb the greasy pole to consultant she has to get these qualifications and her progress up from from ST2, to ST3 and ST4 will mean her getting the qualifications at some point?

Worth a try on the self assessment?

[Eric Mc]

Employees can claim tax relief on job related expenses but the test for allowablity for employees is much stricter than that of a self employed individual.

The test for an employee is that the expense must have beeen incurred by the employee "wholly, exclusively AND NECESSARILLY for the purpose of her employment.

It seems from what you have said that she has decided to take on these courses herself (i.e. they aren't required by her employer and are therefore not a condition of her current employment). On that score, the Revenue would not allow claims for those costs.

[Brown and Boris]

Eric Mc said:

Employees can claim tax relief on job related expenses but the test for allowablity for employees is much stricter than that of a self employed individual.

The test for an employee is that the expense must have beeen incurred by the employee "wholly, exclusively AND NECESSARILLY for the purpose of her employment.

It seems from what you have said that she has decided to take on these courses herself (i.e. they aren't required by her employer and are therefore not a condition of her current employment). On that score, the Revenue would not allow claims for those costs.

Thanks Eric. I wonder if she could offset them against some of her external earnings as she gets a bit from the WRFU, through a staffing agency as she does weekend locum work and some money for certifications for cremations which are all outside her employed job and she has to declare at SA.

[Eric Mc]

The test for allowable self-employed expenses is "wholly and exclusively for the purpose of the trade" - so it is a less stringent test than for employees (i.e. the word "necessarilly" is omitted).

So, there may be some scope for offsetting at least some of these costs against her self-employed earnings.

[Anatol]

What about employed directors of a ltd co?

Do they have to pass the self-employed test, or the employee test? Does it make a difference if they're also the sole shareholders?

Thanks in advance,

Tol

[Eric Mc]

Directors of a limited company are officers/employees of the company - therefore the "employee" test is the one to apply to them personally.

Obviously, the limited company is the actual trading business so the "self-employed" test applies to expenses the company wants to claim against its business profits.