Tax refunds for NHS workers and private healthcare staff - A guide
For years and years, it has been a shared thought across the UK that NHS staff and healthcare workers are very underpaid for all the hard work they do and all the hours they put in, as well as taxed too much.
Since the Covid-19 pandemic, the thought that our National Health Service deserves much more recognition and support for everything that healthcare workers do for the nation has been reinforced as we’ve seen a horrific number of people pass away due to the virus and thousands of NHS workers under tremendous pressure on a daily and weekly basis.
MOn top of this, many healthcare workers, both public and private, have had to work in other departments that they’re not used to or provide extra support to patients; more than what is usually expected of them in their everyday role.
For these reasons, it is more than likely that thousands of NHS and private healthcare workers have spent a lot of their own money for work purposes, whether that’s on mileage, food or the cost of cleaning their uniform.
If you are an NHS staff member or you are a care worker in the private sector, you could be due some tax relief for a range of expenses, so we’ve written this guide to help you determine whether or not you could be entitled to a tax rebate, what sorts of things you can claim tax back for and how to go about claiming back a chunk of your hard-earned money.
NHS staff and private healthcare workers tax rebate explained
Generally, most employees are enrolled on the HMRC’s PAYE (Pay As You Earn) system so that Income Tax and National Insurance is automatically collected from workers before they’re actually paid their monthly salary.
Whether you work for the NHS, you are a private health worker or you’re employed as part of a marketing agency, everyone has to pay tax, but many workers, such as those in the healthcare industry, don’t take into account all of the extra money they spend when working, meaning that they could be entitled to a hefty tax refund.
For example, you may use your own vehicle to get to different patients’ houses and, of course, there are usually ‘normal commute’ rules (i.e. a limit), but for any miles that you drive over this amount, you can claim a tax refund on the fuel you’ve paid for.
Additionally, you may buy food and drink in-between jobs while you’re out and about, and this is also something you can get tax relief on.
As a healthcare worker, you may think that a few pounds here and there for food is not worth claiming for, but when you add up how much you actually spend in total over the course of a year on lunch, petrol and everything else, it can work out to be quite a significant amount, which is why NHS workers often pay too much for tax overall.
Apart from the tax you automatically pay every month, these additional tax rebates are not automatic because HMRC does not have all the information required to work it all out - it is simply assumed that your expenses remain exactly the same every year, which is why it pays to keep a record of all your additional expenses where possible (work-related only) and claim for a tax rebate to get some of your cash back in one lump sum.
How many years can I claim a healthcare tax rebate for?
Many people may assume that you can only claim for expenses paid out over the last year. Thankfully, HMRC lets NHS workers make a claim for tax refunds for the last 4 years’ worth of expenses. You cannot go beyond this limit, however, so you won’t be able to get any money back for anything you feel you may be owed from more than 4 years ago.
What can NHS and healthcare workers get a tax rebate for?
All of the costs you want to claim tax relief for must be related to your job role, which you must have paid for yourself (they must not have been provided by your workplace).
We have made a list of the types of expenses you can claim a tax rebate for below, such as uniform tax rebates, but remember that you’re going to need a record of these costs, such as receipts or bank statements if possible.
If you don’t have a record of these expenses, however, you can use HMRC’s Flat Rate Expenses to work this out roughly. While this won’t be accurate, it’s better than no rebate at all.
Expenses NHS and private healthcare workers can claim refunds for:
- Using your car for work purposes (business mileage) - not standard, everyday commuting to your permanent workplace, though (see below).
- Travel to temporary workplaces (see below).
- Relocating for training (travel costs, removal expenses, legal fees, etc.)
- Training/education courses (including travel costs) - you may, however, need to have done a course that helped you get a certain role in the healthcare industry).
- Professional subscriptions (e.g. Royal College of Nursing - RCM).
- Costs for equipment or items that you have bought to help with your role such as laptops or office equipment (desk, etc) for work use. For purchased items that you will have to use for a few years or more, you could claim under the HMRC capital allowances system. You will, however, need proof of purchase.
- Uniform cleaning (i.e. laundry bills - up to £125 per year), repairing or replacement (NHS staff uniform tax return).
- Shoes and tights.
- Food and drink.
- Accomodation (e.g. if you need to pay for somewhere to stay while working at a temporary facility).
- Some union and professional body fees (organisations like the Nursing and Midwifery Council & RCM).
There may be expenses not listed above that you may be able to claim tax against, but if you’re at all unsure, we highly recommend speaking to a tax professional.
Permanent vs temporary workplaces - What counts and what doesn’t?
It’s important to know that simply driving to your permanent workplace everyday will not warrant a tax refund for healthcare workers.
In order for NHS workers to be eligible for tax relief on mileage, they need to have driven to ‘temporary workplaces’ as termed by HMRC - this includes any place that you have had to travel to work for a period of less than 2 years.
For example, nurses that need to visit patients in their homes are more than likely going to be eligible for a tax refund on their mileage.
If you were training to be a healthcare worker in different medical practices over less than 5 years, you may also be able to claim for expenses (as these are temporary workplaces).
If, however, you are expected to travel to a few places that are located in the same area, such as a medical centre, hospital or clinic, these may still be considered to be permanent workplaces, as it is thought that you don’t have to travel far to get to them.
Additionally, if you work on a rotational contract (i.e. working in a number of hospitals) during a certain number of years, you are unlikely to be eligible for tax relief.
There’s no doubt that there can be confusion around what does and what doesn’t count towards a tax claim and it is common to feel like you need an expert to help you - especially if you want a successful claim without wasting too much of your time. In this case, it is important to speak to a tax professional if you’re really not sure.
How to apply for a healthcare tax rebate
If it all seems too intimidating, there’s no harm in getting an accountant or tax professional to get the process started for you, but bear in mind that you will likely have to pay a fee for their services. One benefit to this, however, is that you have the peace of mind that you’ve done it all properly and covered everything you need to in order to get the most tax back.
What do I need before applying?
As well as the below, you must set up a Personal Tax Account which is free and allows you to view all details relating to your tax, as well as information from your employers, bank (or building society) and government departments.
- A record of all the places you’ve had to travel to for work purposes (including dates and mileage).
- Receipts for all of your work expenses, if possible.
- Your employment contract.
- Driving licence or passport for proof of ID.
- Bank statement, utility bill or something else that proves your address.
- Supporting documents proving that you have a valid MOT certificate for your car.
- Your P60 end-of-year certificates (from 2016 and beyond) or P45s (if you have them).
What about a self-assessment tax return?
If the total amount of expenses that you wish to claim is more than the value of £2,500 then you will need to complete a self assessment tax return form to apply for your tax refund. Before you can do this, you’ll need to register with HMRC and complete an annual tax return - the deadline for this is 31st January.
If you have additional untaxed money that you’re getting as a type of income or you have savings or investments that also act as income and are more than £10,000, you will need to use the self-assessment tax return system for these, too.If you are a self-employed healthcare or NHS worker, you are not in the PAYE system, so you will need to complete a self-assessment tax return.