The NASUWT’s brief guideto tax for teachers
Health warning!
This leaflet provides a brief outline of the various tax allowanceswhich teachers may be eligible to claim under UK legislation. Thenotes on income tax allowances contained in this leaflet have beendrawn up in consultation with senior HM Revenue and Customsofficials. They give guidance on the allowances you may beable to claim against your earnings, but they are advisory andhave no binding force. Decisions on individual claims willdepend on all the facts and circumstances.
Expenses allowed against tax
The expenses allowed as a deduction from employment incomeare limited by Section 336 (1b) of the Income Taxes (Earnings andPensions) Act 2003 (ITEPA 2003). Specifically, to qualify for relief,the expenses must be either ‘qualifying travelling expenses’ orother amounts expended wholly, exclusively and necessarily in theperformance of the duties of the employment. There are presentlyno standard tax allowances for teachers, but the notes belowexplain what can and cannot be claimed.
Subscription to a professional body
An allowance may be claimed under Section 344 of ITEPA 2003, in respect of the annual subscription paid to aprofessional body approved by HM Revenue and Customs. Twothirds of the NASUWT subscription is allowable under thisprovision. Only the restricted amount should be claimed or enteredon a self-assessment tax return.
General Teaching Council (GTC) fees are allowable as a deductionfrom income. The Scottish General Teaching Council (GTCS) feehas been approved for some time. The majority of teachers inWales will not need to claim relief as the fee to the GeneralTeaching Council for Wales (GTCW) will be deducted from theirsalary and tax relief given automatically at that stage. Teachers whoregister with the General Teaching Council for England (GTCE)need to apply directly to their tax office as will teachers in Waleswho do not have their fee deducted from their salary. The GTCEand the GTCW have produced a form which teachers can use;alternatively you can claim relief in writing or by telephone.
In respect of teachers in Northern Ireland from whom the GTCregistration fee is deducted directly from their salary, a feeallowance is automatically paid by the Department of Education(DENI) to the teacher in respect of the GTCNI fee. This takes placeat the same time deduction is made and is carried out before taxand national insurance is deducted and there is consequently noimpact on the teacher’s net pay. In respect of teachers who paythe GTCNI registration fee in response to an invoice, a feeallowance can be claimed directly from the Department ofEducation, who have made an undertaking to pay the allowance toteachers if they are required to register and undertake paid workin grant-aided schools within the registration period. Arrangementsregarding the collection of the GTCNI registration fee and thepayment of the Department’s allowance were agreed afterconsultation with the tax office who advised at the time that taxrelief on the GTCNI registration fee would not be applicable if ateacher was in receipt of the Department’s fee allowance payment.
Once claimed, relief should be given via the PAYE code. However,it is advisable to check your tax coding reflects the correctsubscription each year.
Special clothing
A deduction may be claimed for the cost of cleaning, repair orreplacement of specialist clothing. No deduction can be claimedfor the initial cost of such clothing.
Specialist clothing is clothing other than ordinary civilian clothing thatis necessary to perform your duties and that is not used outsidework. For example, this might include protective clothing such asoveralls, boots, goggles, helmets, clothing for use in catering andscience departments etc, games and PE kit.
A deduction cannot be claimed where appropriate clothing isprovided by the school or college, even if you choose instead tobuy you own, or where you can obtain reimbursement for theexpense from your employer.
In dealing with expenses claims from PE teachers (i.e. teacherswho are contractually obliged to teach or supervise PE or sports),the cost of cleaning, replacing and maintaining what is recognisablygames kit will normally be allowable. This can also cover itemsused in such areas as rural studies or field trips. Despite the factthat many of these items could be worn whilst not in theperformance of duties, HM Revenue and Customs will not normallyrefuse a deduction merely on the basis that there is incidental useof the clothing outside school. If, however, the claim appears to beexcessive, taking one year with another, or if it appears thatsubstantial expenditure relates mainly to out-of-school or voluntaryactivities (e.g. clothing and equipment for a sport which occupiesvery little of your teaching time, but which you play at arepresentative level elsewhere) further enquiry may be necessary.
You should keep a record of any admissible expenditure and retainreceipts (preferably with the items identified by the retailer) forsubmission to the Inspector, if required. It is not always easy tocalculate the cost of washing specialist clothing and so HMRevenue and Customs will allow a flat rate expense, currently £60,to cover the cost of cleaning.
Books and journals
Where you are required to purchase books for the preparation oflessons, or to use in lessons, an allowance will normally be given.This will only be the case if teachers teaching at your level arerequired to purchase their own resource material.
No allowance will be given in respect of books purchased for thegeneral improvement of a teacher’s own knowledge andbackground reading or in the pursuit of further qualifications.
Receipts and records of purchases should be retained in case theInspector of Taxes wishes to examine them.Journals are sometimes published by professional bodies andcharged for in addition to the annual subscription. If the body isapproved by HM Revenue and Customs, teachers who take out asubscription to the body may be able to claim for both. Enquirieswith regard to the eligibility of the journals for tax relief should bemade to the professional body concerned. Alternatively, theinformation can be obtained from the HM Revenue and Customswebsite
Equipment
Generally speaking, major items such as computers, other digitaland electronic equipment and drawing instruments are providedby the employer. Items of equipment purchased out of personalchoice will generally fail the test that they are necessary for use inthe performance of your duties. The fact that a computer, forexample, is used in the preparation of lesson plans or even in thedelivery of lessons themselves is not enough to secure anallowance if personal choice played any part in your decision tobuy it.
Where, exceptionally, it is necessary for you to purchase orprovide equipment for use in the performance of your duties, taxrelief in the form of capital allowances are normally given for thecost over a number of years. If equipment is used partly in theperformance of duties and partly for other purposes, theallowances are restricted accordingly.
Home accommodation
Although teachers often perform some of their contractual dutiesoutside school, it is not necessary, in the objective sense that thetax rules require, for them to maintain office facilities at home tocarry out their professional duties. For an employee tosuccessfully claim relief for the costs of working at home, it has tobe demonstrated that the nature of the employment means thateach and every person doing the job needs to work at home.
Qualifying travelling expenses
Qualifying travelling expenses are travelling expenses incurredwhile you are performing your duties and also travelling expensesincurred between your home and any place at which you work thatis not a permanent workplace. You cannot claim travellingexpenses where the employer provides an alternative means oftransport.
Expenses paid to you for qualifying travel in your car are nottaxable if there is no element of profit in the payments. There is noelement of profit if the amount received is less than or equal to theapproved amount for mileage allowance payments. If theexpenses you receive are less than the approved amount, thenyou can claim for the difference between the amount actuallyreceived and the approved amount. Higher amounts are subject totax. The rules are explained in HM Revenue and Customs leafletIR124 ‘Using your own vehicle for work – a factsheet foremployees’ and the current rates can be found at
Travelling expenses incurred while you are performing your dutiesmay include travel from one school site to another, or betweenyour school and any other place you are obliged to visit to performyour duties, for example a sports ground or outdoor pursuitscentre.
Any school that you attend regularly is likely to be a permanentworkplace. A permanent workplace is any place you work exceptplaces that you will attend for a limited duration or for a temporarypurpose. In particular, if you can expect to be at a school for morethan 24 months, or for most of the duration of your employment, itwill be a permanent workplace. The rules are explained in HMRevenue and Customs leaflet ‘Using your own vehicle for work –a factsheet for employees’ and the section on their website entitled‘Income tax and company vans for years up to and including2004/05’. Places that are not likely to be permanent workplaceswill include schools that you attend infrequently and places thatyou are obliged to attend for out-of-school activities. The maximumyou can receive tax free for a tax year is your mileage on workjourneys multiplied by a set rate per mile. There are three kinds ofvehicle, and the rate depends on the kind you use – car or van,motorcycle and cycle. You can find the rates at
Furthermore, it should be noted that attendance at parents’evenings is not qualifying travel and so any expenses paid by youremployer are subject to tax. The treatment of these expensesstems from the list of professional duties in the School Teachers’Pay and Conditions Document. This states that participating inmeetings arranged for the purposes of communicating andconsulting with parents shall be deemed to be included in theprofessional duties which a school teacher may be required toperform. It is therefore treated in the same way as any other travelfrom home to school and as such not an allowable expense.
Teachers in receipt of travel expenses for attendance at parents’evenings should clearly establish with their employer whether taxhas or has not been deducted. Receipt of payment withoutdeduction of tax creates a personal liability for tax.
Travelling expenses arising from redeployment
Where redeployment results in additional travel, a taxableallowance will often be paid to cover these extra costs. If youremployer helps you to move house there may be tax to pay on anypayments or benefits you receive. Due to the exceptional nature ofthis event details are not given here but can be found on the HMRevenue and Customs website in the section entitled ‘Income taxand national insurance contributions on relocation packages’.
Examination marking
Since April 1983 the examination boards have deducted tax at thestandard rate before payment of fees to the examiner. However,travelling and subsistence payments continue to be paid withoutdeduction of tax. Reasonable claims for the use of home facilitieswill usually be successful.
Pension benefits
There is no limit on the amount of money you can save in apension scheme or the number of pension schemes you cancontribute to, although there are some limits on the amount of taxrelief you can receive. For detailed advice we recommend that youseek independent financial advice from a qualified financialadviser.
Consultancy work
Any additional work other than the employment in the school couldbe classified as either employed or self-employed and adviceshould be sought from a tax adviser or an independent financialadviser with detailed tax knowledge. Information is also availablefrom HM Revenue and Customs.
Further information
There are many sources of advice on matters of taxation.
Useful website addresses are:
The telephone number for your local HM Revenue and CustomsOffice can be found in the local phone directory or on their website.
HM Revenue and Customs publications can be obtained fromlocal offices or the website
NASUWT
Hillscourt Education Centre,
Rose Hill, Rednal,
Birmingham B45 8RS
Tel: 0121 453 6150 Fax: 0121 457 6208
E-mail:
Website:
08/02086 England, Wales, NI and Scotland