How Healthcare Workers Can Get a Tax Break​

When you're claiming a tax rebate, HMRC doesn't care what work you do. From nurses and midwives to physiotherapist and healthcare assistants, working in the medical profession doesn't prevent you from claiming back what the taxman owes you. Most of the time though, the taxman won't automatically know that he owes you money. That's why you have to claim yearly healthcare workers tax refunds to get your money back.

Don't miss out: claims cover more than 1 year

Even if you miss out on a claim, there could still be time to get your tax refunds from previous years. There are limits to the taxman's patience, though. The tax refund rules say you have a hard deadline of 4 years to claim your tax back. Anything you’re still owed after that deadline is gone for good.

Why aren't tax refunds automatic?

The Pay As You Earn (PAYE) system generally isn't bad at working out the tax most people owe. However, it's only as good as the information it's working with. When it's contending with expenses like travel to temporary workplaces, the system tends to trip itself up because HMRC won't automatically have the necessary information to get its calculations right.

Of course, work expenses have a nasty habit of changing year on year. Unless you prove otherwise, HMRC often has no choice but to change your tax code to account for what it thinks you owe. This can lead to severe headaches when your costs change, since your tax code won't be keeping up with your expenses. That's why you’re better off making full yearly refund claims and watching your tax code carefully.

Check your tax code now

Why do healthcare workers pay too much tax?

There are lots of reasons why a healthcare worker might have overpaid their Income Tax. Under PAYE, the tax you owe is taken from your pay before you get it. However, all the “hidden” expenses of doing your job actually qualify you for some of that tax back. These “tax deductible” costs can include things like work travel, professional subscriptions and even upkeep and replacement of equipment and uniforms.

As a nurse working through an agency, for instance, you might have a range of duties to perform throughout a day, using your own vehicle to travel between them. You can’t claim anything for a “normal commute” between your home and your first job of the day, but there's more to work travel than that. All the other trips you make during that day’s work could easily still be covered by the tax refund rules.

There's more. Buying food while you’re out on the road for work can count toward your healthcare worker tax refund as well. Those costs might seem relatively trivial at around £5-£10 a day, but they add up over time – as does the tax refund they earn you.

Other, longer-term costs can also factor into your claim, including professional subscriptions like Royal College of Nursing fees, for instance. Even things like laundry bills for your uniform can count toward your refund, assuming you're paying them yourself. You can't, for instance, claim a tax refund for washing your uniform if your employer has free laundry facilities available for you—even if you're doing the washing elsewhere.

Keep it simple

Tracking all your essential work costs might sound like a lot of effort, particularly in such a demanding line of work as healthcare. If you're overstretched already, you could scrap the paperwork and just use HMRC’s pre-calculated Flat Rate Expenses system instead. Basically, these figures take an educated guess at your yearly costs, allowing you to use HMRC’s estimates instead of working out your actual costs when you make your claim. You probably won’t get back everything you're owed, but it can be a little simpler—and a lot better than leaving your refund in HMRC’s hands.

Healthcare tax refunds explained: what counts towards your claim?

As with any other sector, not every mile you travel or pound you spend will count toward your tax refund. As we mentioned above, daily commutes to permanent workplaces don't qualify. To earn you some tax back, the mileage you're claiming for needs to be to and from “temporary workplaces”. Generally, this just means somewhere you work for less than 24 months in a row.

For example, a nursing job that sees you travelling to patients’ homes could be eligible for a pretty decent tax refund. On top of this, subsistence costs while you're on the move can also be included in your refund claim. We're talking about things like accommodation and food costs. Again, while those bills might not seem like much from day to day, they can stack up over time into a healthy tax refund.

Healthcare tax refunds can be complex, especially when you're travelling to a number of hospitals or clinics within the same general area. If your mileage and travel times don't change much between workplaces, HMRC might call the entire region you're travelling in to be a “permanent workplace”. Wrinkles in the rules like this are why it's always best to get professional advice when making your claim. The regulations are easy to trip over, but with the right help you can steer clear of problems. For example, rotational contracts, that have you working full-time at a string of hospitals over years, usually won't qualify for work travel tax refunds. However, training under (for example) a single 5-year contract could mean each workplace counts as temporary. In effect, it's a single employment with multiple temporary workplaces.

You may still be owed some tax back even if some of your costs are being reimbursed by your employer. The rules around HMRC's Approved Mileage Allowance Payments (AMAP) say that, if you're not getting the full amount you qualify for, you can claim back the difference in a tax refund. The NHS has its own rates as well, if you're employed by them.

Importantly, the costs you’re claiming tax relief for must be essential for your work, and being paid from your own pocket. HMRC will expect you to show proof of what you’re spending in your claim, so records and receipts are essential. Once again, though, the Flat Rate Expenses system can offer an easier way if you don’t mind using HMRC’s figures.

If you're buying things like laptops or office equipment for work, you may also be able to claim capital allowances for them. This is generally for items with a fairly long expected lifespan. As always, you'll need to be paying for them yourself to qualify for tax relief.

Relocation and training costs

If you have to relocate for training, remember it's not just the your basic travel costs that matter. Removal expenses, legal fees, subsistence and even the replacement of some domestic goods can all earn you some tax relief. If you're being reimbursed for any of these things, whatever your employer chips in is tax-exempt up to £8,000. As always, keeping good records is the key to making the most of your claim.

Training and education expenses can be tricky in healthcare tax refund claims. The basic rules still apply, so any courses need to be essential for your work to qualify for tax relief. Again, we're talking about more than just your basic fees here. Money spent travelling to a qualifying course or training session can also count toward your claim, for example. This is another area where it's worth talking to a professional. Even if the training's compulsory, its costs still may not qualify for tax relief. For instance, training in preparation for taking up a particular position isn't the same actually performing that role's duties in the taxman's eyes.

Information you need for a healthcare tax rebate

It takes the following basic information to process most healthcare tax rebate claims:

• A list of all the places you've travelled for work
• Receipts for your expenses if you have them
• Your contract of employment
• Copy of your photo ID
• Proof of address
• Wage slips
• Other supporting documents like your MOT certificate, P60 or P45

You'll also need to set up a personal tax account. It's free and lets you keep tabs on all your key tax details. That includes all information from employers, banks and building societies and other government departments. 

How to make a healthcare tax refund claim

To be sure your claim's handled properly and effectively, you can have a tax professional get things moving on your behalf, like us at RIFT Tax Refunds. Alternatively, you can kick the process off yourself on the HMRC website.

On average, it can take HMRC up to 12 weeks to process a tax refund claim. Then anywhere from several days to 3-4 weeks on top of that to receive your rebate.

Find out more about how long it takes to get your tax refund payment.

Will I need to file a self-assessment tax return?

If you have expenses of over £2,500 to claim, you'll need to use a Self Assessment tax return to get your refund. You may also need to use Self Assessment if you have other untaxed money coming in or investment/savings income over £10,000. To use the system you have to register with HMRC, and then file a yearly tax return by the 31st of January.

Does it matter if I'm self-employed?

If you're self-employed in the healthcare sector you may still be owed money. The difference is that you can’t claim a PAYE tax rebate, since you’re outside of the PAYE system. Instead, you’ll record all your essential expenses in your yearly Self Assessment tax return. Those costs, which you’ll still need to have detailed records of, will then bring down the amount of profit you’re being taxed on.

Support for healthcare workers from the impact of Covid-19

The coronavirus pandemic has affected people worldwide, changing the way we work, socialise and even live. For obvious reasons, those on the front lines of the healthcare sector have been among the most severely affected by this.

It’s no surprise that a report from the Institute of Public Policy Research think tank, Care fit for carers, found that the COVID-19 pandemic had a “severe impact” on the mental health of UK healthcare workers.

In our hour of greatest need, the NHS and social care system was there for us as it always has been—but who was there for them?

In April 2020, the NHS launched a hotline to support and advise healthcare staff during the coronavirus pandemic. Offering support outside the workplace, volunteers from charities listened to concerns and offered psychological support wherever possible.

The public also did their part. People ran fundraisers, celebrities donated huge sums of money and businesses gave away freebies. There are many examples of simple acts of kindness lifting the spirits of healthcare workers and making their lives easier and safer.

The World Health Organization has said:

• Feeling under pressure is perfectly normal during a crisis. If you do feel stressed, it doesn't mean that you're weak or aren't up to the job. As we continue to deal with the aftermath of the pandemic, it's just as important to manage your mental health as your physical well-being.
• Take care of yourself. Use helpful coping strategies such as getting enough sleep and rest during work or between shifts, eating a healthy diet, keeping up exercise and staying in touch with family and friends.