List 3 AMENDED 01 March 2024

List 3 was amended on 01 March 2024.? This was not an update to the details but an amendment to the information contained within it.?

Let’s review this logically and look at two things:?

1. What is List 3, and
2. What are the changes?

Part 5 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA) allows for certain deductions to be made from taxable pay – i.e., to reach a figure called net taxable pay which is the pay on which Income Tax is calculated.? This part includes things such as expenses for business travel.?

Sections 343 and 344 of ITEPA allow for professional membership fees and annual subscriptions to be provided free of tax and National Insurance where:?

• It is paid to a body that has HMRC approval, and
• The activities of the body are of direct benefit to or concern the profession practiced in the performance of the duties of the employment

?The full list of professional bodies that have the necessary HMRC approval is published in a document known as ‘List 3’.? List 3 is essential reading for the reward professional, as the day-to-day professional impacts of a body appearing on it are that:?

• Employers can reimburse fees and subscriptions without fear there will be a P11D implication and / or
• Individuals can claim tax relief on the fee or subscription that they have paid (if the employer has not actually reimbursed the fee or subscription)

?The way in which tax relief is claimed depends on whether the amount is up to or over ￡2,500 over the course of the tax year.

The 01 March 2024 amendment has nothing to do with List 3's purpose.

HMRC’s update says:

What this means is that there is now a section at the top of List 3 which links to HMRC’s ‘check if you can get tax relief and if you can make a claim online’ tool.? This is not a new tool but linking to it via List 3 is new.

The Tool's Purpose

The tool allows the taxpayer to select the expenses that they want to make a claim for to reduce their net taxable pay:?

• Working from home (the expenses of)
• Uniforms, clothing and tools (that are necessary for work such as cleaning or repairing the uniform)
• Vehicle costs (including the cost of fuel)
• Travel and overnight expenses (where the employer has not reimbursed them)
• Professional fees and subscriptions (i.e. the ones that are detailed within List 3)
• Equipment (that is necessary to perform work) and, of course
• Other

Using the Tool

There are various questions that are asked as you use the tool:?

• Who are you claiming expenses for? (i.e. yourself or on behalf of someone else)
• Are you claiming for expenses after 5 April 2019? (as you can only claim for the current tax year and the 4 previous ones)
• Did you pay tax in each of the years you are claiming for? (as you can’t get tax relief unless you paid tax)
• Do you complete Self-Assessment returns? (if ‘yes’, claims must be made using the SA return)
• Are you claiming expenses of more than ￡2,500 in a single tax year? (if ‘yes’, claims must be made using the SA return
• Has your employer paid some of the expenses? (if ‘yes’ you cannot make a claim but if the employer has not paid them or paid some of them then you can continue with the online claim)

The tool then asks question about the various expenses you want to claim.? Eventually, you will end up at the place where you can make the expense claim which will require a Government Gateway user ID and password.

Getting back to where we started, this is an amendment to the text contained within the List, NOT an update to the list of the professional bodies themselves.?

Handy to have this link, nevertheless.