Making the transition from University into the real world can be daunting, and your financial situation is going to flip on its head! You’ll be earning a great income, but your outgoings are likely to go up too, whether that’s due to relocating, running a car, paying council tax… sounds expensive, right?
Wouldn’t it be great if you could claim back money for some of the expenses you’ll have to fork out for as a Foundation doctor or dentist? Look no further… This article is going to run through claiming expenses – what they are, how to claim them, and how much money you’ll get back.
What is an expense?
Expenses are goods or services that you’ve had to pay out for in order to carry out your job. We’ll give some examples further down in this article.
Who pays me back for my expenses?
This all depends on the type of expense.
Your employer (in Foundation training, that’s the NHS trust you work for) might reimburse you fully for some expenses, such as mileage and additional courses. They’ll have an expenses policy that outlines all of the expenses that qualify, so make sure to check before you shell out! You’ll use a claim form (DFTs use an FP84) which you’ll submit along with your receipts, and you will be reimbursed through the payroll. This means that the money will come back to you in the next month’s pay and will appear on your payslip.
There are some expenses that the trust will not reimburse – but aall hope is not lost – you may be able to claim tax relief from HMRC. For eligible expenses, you are able to claim back tax relief at the rate you pay (likely 20% as a Foundation doctor/dentist) on the cost of the expense, or alternative a flat rate set by HMRC. You use a P87 form if the expense is under £2,500, and a self-assessment if it’s over. You’ll get the money back either as a lump sum (who doesn’t love a cheque in the post?!) or by an increased personal allowance. You can check this by looking at your tax code on your payslip, or logging into HMRC online using a Government Gateway.
What expenses can I claim for?
Subscriptions and membership fees
When you’re paying for professional fees and subscriptions with membership bodies such as BMA, indemnity companies, GMC or Royal Societies, there will be monthly or annual fees that come out of your account. The good news is you can claim tax relief on these payments, as long as there’s a requirement to be a member of the organisation to do your job. There are a couple of situations where you wouldn’t be able to claim the tax back, such as if it’s a life membership subscription or if any of your subscriptions have initially been subsidised by your employer.
Your employer is likely to reimburse you for miles you’ve had to drive for work, the rate for which they will set out in their expenses policy. If your employer does not, you can claim tax relief on this mileage from HMRC. There are a couple of factors that dictate how much you can claim; whether you’re using a vehicle that you’ve financed with your own money, or a vehicle financed by your employer. If it is your own vehicle, the rate at which you are reimbursed will be higher to take into consideration wear and tear. It won’t be possible to claim for things like MOTs, road tax or general maintenance of the vehicle.
Tools and specialist equipment such as a stethoscope, operating glasses or loupes, as well as your uniform can also be claimed back as expenses, as long as they are solely for work related use. These could be the replacement of tools for example, or the cleaning of any uniform you need for work, as long as these are not supplied by your employer (even if you choose to do your own laundry!). Can you claim for the full amount? This depends on whether your job has an agreed flat rate expense. If so, you can claim the agreed fixed amount, or if not, you can claim for the amount you’ve spent, which is why it’s vital you keep hold of all receipts you use for work related expenses.
Last but by no means least, as an employee you are able to claim back for any courses that you undertake, ensuring they’re “an intrinsic part of the employment and one of the duties of the employment”. These can work out to be quite expensive so make sure you keep track of all the additional courses throughout the year.
Claiming back through the trust
Expenses incurred within daily working will be paid back via PAYE through your employer and will be added onto your payslip. Your employer will maintain deadlines for expenses, for example claiming for mileage within 3 months of the journey. The claims process will then be dealt with by payroll and reimbursed in your pay through PAYE (this stands for Pay As You Earn, where your employer arranges for your tax, national insurance etc. to be paid to HMRC). As a tip for starting work, make sure you read your trust’s expenses policy when you start work, and get familiar with the process of submitting a claim.
You can check which professional companies are approved by HMRC for tax relief: https://www.gov.uk/government/publications/professional-bodies-approved-for-tax-relief-list-3/approved-professional-organisations-and-learned-societies#d
Foundation Year Dentists
There are additional expenses you can claim money back for as a Foundation Year Dentist too. Similarly to the above, you can claim travel expenses if you attend a Dental Foundation Training course within the UK, so make sure you keep hold of any receipts or proof of transactions. If you’re driving yourself to the course, you’re eligible to 25p per mile, plus an additional 2p per mile for any dental passengers in the car. If you travel on public transport such as the train, you can claim back for standard class rail travel.
You will be able to claim a meal allowance if you’re away from your practice for an extended period of time. You’ll be able to claim £5 for lunch if you’re away for 5 hours, and £15 for an evening meal if you’re away from the practice for 10 hours or more.
How do you claim?
Claiming for the above expenses as a foundation year doctor or dentist can be conducted a couple of ways, dependant on how much your claim is for. For example, if your claim is less than £1,000, you can put together a letter to HMRC, summarising the details and the total for the tax year. In the summary you will be required to provide personal details such as your name, phone number, email address, as well as your National Insurance number and employer’s PAYE reference number.
If your claim exceeds £1,000, but is less than £2,500, you’ll need to complete a P87 form on the HMRC website. You’ll provide a summary of your total expenses within this form, before HMRC use it to work out how much you are owed in relief payment. At the end of the tax year, your tax code may change in order to reflect this.
Is the process of claiming these expenses the same if you are self-employed?
Claiming business expenses when self-employed is slightly different. Firstly, you need to ensure you keep all of your business expenses as proof. You’ll then add up all of your expenses for the tax year and add the amount onto a Self-Assessment tax return, which is a system that HMRC uses to collect income tax. They’ll then take the amount you’re owed in business expenses away from your tax bill at the end of the year.
Whilst it may seem a bit confusing at first, it’ll soon become second nature to you whether you’re claiming expenses back as an employee or as self-employed. Just remember to ALWAYS keep hold of receipts and payments!