“We are writing to give you the very welcome news that you may be able to receive tax relief on AKT and CSA examination fees paid since 2009.
Based on the advice of tax experts, we have in the past informed our trainees that the fees for AKT and CSA examinations are not tax deductible.
Recently, however, a former trainee has successfully applied for and received a refund from HMRC for ‘overpayment of exam fees’ by citing the case of Revenue & Customs Commissioners v Dr Piu Banerjee ([2010] EWCA Civ. 843).
Once informed of this positive development, we sought clarification from our tax adviser, who stated that ‘some very specific criteria have to be satisfied to qualify for relief on the ‘Banerjee principle’, in particular, that the doctor is an employee employed under a training contract’. We believe that this situation applies to the vast majority of our trainees and as such wanted to make you aware. Furthermore, he cited HMRC’s manuals at EIM32530, which provide guidance on the requirements for claiming:
It is important in cases, where relief is sought for training costs incurred under the terms of a training contract, for the employee to be able to demonstrate, by reference to the contract of employment and all other relevant documentation, that:
- Training is an intrinsic part of the contractual duties of employment.
- All other duties are being undertaken as part of the training process. They constitute the practical aspects of the training process and are intended to complement the theoretical aspects of the training, which include the externally provided training.
- There is a mandatory requirement for the employee to undertake external training as an intrinsic part of the duties of the employment.
- Failure to complete the training and obtain 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.
We are further advised that claims for tax relief can be submitted for relief as far back as four years, i.e. for payments made since April 2009 / January 2010.
Unfortunately, we are unable to obtain a universal ruling from HMRC within short timescales that would save you from having to argue your individual case.
However, as we want to help you as much as we can, we have set up a dedicated web page about this issue. See Link. This includes an example letter to HMRC and also has the option for former trainees to request a copy of the transactions that we hold about your account. Whilst this is not conclusive proof of payment and HMRC will doubtless require applicants to provide proof, it does give you an indication of when you might have made payment in order for you to search your own records. HMRC will require proof of payment in the form of a credit card or bank statement as was produced by a former trainee who has successfully applied for and received a refund.
If you believe you are able to claim, please seek advice from your own personal tax adviser. We trust you will appreciate that the College cannot advise you about tax matters, nor can we provide you with advice or assistance in making claims for tax relief on fees or subscriptions you have paid.
Remember, the responsibility for providing accurate information to HMRC rests with the individual.”
If you need any help in preparing your claims please contact us on 0141 221 2257 or contact@thomasbarrie.co.uk.