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  • Expenses and benefits A to Z

Subscriptions and professional fees

This guide explains your tax and National Insurance contributions (NICs) obligations if you cover the costs of an employee’s subscriptions or membership fees for a professional body or similar organisation.

On this page:

You pay your employee’s subscriptions or fees on their behalf

Definitions or restrictions

You cover the cost of an employee’s subscriptions or fees for a professional body by paying the organisation directly.

What to report, what to pay

For employees earning at a rate of less than £8,500 per year:

  • report on form P9D – section A(2) – unless you have a dispensation covering this item
  • if the professional body is included in HMRC’s ‘List 3’ (follow the link at the end of this section for more information), then you have no tax or NICs to pay
  • if the professional body isn’t included in ‘List 3’, then add the value of the benefit to the employee’s earnings when deducting and paying Class 1 NICs (but not PAYE tax) through your payroll

For company directors or employees earning at a rate of £8,500 or more per year:

  • report on form P11D – section M – unless you have a dispensation covering this item
  • if the professional body is included in HMRC’s ‘List 3’, then you have no tax or NICs to pay
  • if the professional body isn’t included in ‘List 3’, then add the value of the benefit to the employee’s earnings when deducting and paying Class 1 NICs (but not PAYE tax) through your payroll

How a dispensation can reduce your expenses and benefits reporting

Work out the value to use

The value to use is the amount you pay to the professional body on the employee’s behalf.

Go to HMRC’s ‘List 3’ – deduction for fees and subscriptions

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You reimburse your employee for their subscription or fees

Definitions or restrictions

Your employee pays for subscriptions or fees for a professional body and you reimburse them.

What to report, what to pay

If the professional body is included in HMRC’s ‘List 3’ (follow the link at the end of this section for more information), then:

  • add the value of the benefit to the employee’s other earnings when deducting and paying PAYE tax (but not Class 1 NICs) through your payroll

If the professional body isn’t included in ‘List 3’, then:

  • add the value of the benefit to the employee’s other earnings
  • deduct and pay PAYE tax and Class 1 NICs using your usual payroll procedures

Work out the value to use

The value to use is the amount you reimburse to your employee.

Go to HMRC’s ‘List 3’ – deduction for fees and subscriptions

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Where to report – understanding the £8,500 threshold

It’s important to choose correctly between forms P11D and P9D. The form to use depends on the whether the employee is a director of your company and on whether their earnings are above or below an annual rate of £8,500. For more information – including details of what’s included in the £8,500 threshold - follow the link below.

End-of-year forms at a glance

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Technical guidance

EIM32880: Professional fees and subscriptions: introduction

NIM05695: Membership of a professional body - payment of fees or subscriptions

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