Tax Break For Healthcare Workers

When it comes to tax refunds, it really doesn’t matter what line of work you’re in. Whether you're a nurse, midwife, physiotherapist or healthcare assistant, working in healthcare doesn’t mean the taxman should hold onto any more of your money than he’s supposed to. Spending – and even risking – your own life saving others shouldn’t mean losing out on the money you’re owed by HMRC. A lot of the time, though, you actually have to claim it back – and that’s what trips so many healthcare workers up.

The bottom line: if you’re taxed through PAYE and paying from your own pocket for travel to temporary workplaces, you’re in line for a yearly tax rebate. Even if you’re being reimbursed for some of your costs, you might still have a claim for the rest.

It doesn’t stop with work travel, either. The tax rules mean healthcare workers can claim refunds for a whole range of everyday, essential costs. Whether you work in private healthcare or the NHS, you should still be claiming back what you’re owed each year.

How many years can I claim?
Why aren't tax refunds automatic?
Why do healthcare workers pay too much tax?
Keep it simple
What counts toward your claim?
Relocation & training costs

Information needed to make a claim
How to make a claim
Will I need to file a tax return?
What if I'm self-employed?
Support from COVID-19

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

It’s important to remember that the taxman really isn’t trying to cheat you. In fact, even if you’ve missed out on making a tax refund claim before, you could still get back what you’re owed from previous years. Under HMRC’s rules, you can make a claim based on your work expenses for up to 4-years back. Anything you’re still owed after the deadline expires is gone for good, though. There’s a limit to the taxman’s patience.

Why aren't tax refunds automatic?

The Pay As You Earn (PAYE) system generally does a decent job of keeping the tax most people pay under control. The problem is that HMRC won’t always have the information it needs to work out your tax bill correctly. When you’ve got work expenses like travel to temporary workplaces, the PAYE system tends to struggle. On top of that, a lot of your work expenses change over time. HMRC will tend to assume that your expenses stay the same year-on-year, and will sometimes change your tax code to account for them. This can lead to severe headaches when those expenses change - which is why you’re better off making full yearly refund claims and watching your tax code carefully.

Why do healthcare workers pay too much tax?

The PAYE system takes the tax you owe out of your earnings before you get them. However, a lot of the “hidden” day-to-day expenses of doing your job actually qualify you for tax relief. These “tax deductible” costs include certain types of work travel, professional subscriptions and even cleaning, repair or replacement of equipment or uniforms.

What you can claim depends on your personal circumstances. Here’s an example:

Suppose you’re a nurse, working through an agency. You’ve got a variety of jobs to do throughout a day’s work, and use your own car to get between them. Like most people, you can’t claim anything for the “normal commute” between your home and your first job of the day. However, all the other trips you make during that day’s work will be covered by the tax refund rules. On top of that, if you’re buying food while you’re out travelling for work, those costs can count toward your claim as well. It’s worth keeping track of them, too. It might not seem like a lot when you’re spending £5-£10 a day on food and drink to keep yourself going, but the costs add up over the year – and so does the tax refund you’re owed.

Beyond your simple daily expenses, you might have other, longer-term costs to claim for. If you’re paying subscriptions to professional bodies like the Royal College of Nursing, for instance, you might qualify for a tax refund on them. Even relatively mundane things like laundry bills for your uniform can count toward your refund, as long as you’re paying them yourself.

Keep it simple

Keeping track of your essential work costs might not sound like a lot of fun, particularly with a job as demanding as yours. However, it really is the key to getting back everything the taxman owes you. Even so, there’s an easier way if the extra paperwork’s a serious hassle. Rather than keeping receipts and records for your work costs, you could use HMRC’s pre-calculated Flat Rate Expenses system instead. Basically, these figures take an educated guess at the kinds of costs you’re facing each year, meaning you can use HMRC’s figures for your claim instead of working out your own. You probably won’t get back everything the taxman owes you this way, but it’s simpler and it’s definitely still better than leaving your refund in HMRC’s pockets.

Healthcare tax refunds explained: which costs count toward our claim?

The first thing to understand about healthcare tax refunds is that not every mile you travel or pound you spend will count toward your claim. A daily commute to a permanent workplace, for example, won’t earn you any tax relief. To qualify for a refund, your work travel needs to be to and from what HMRC calls “temporary workplaces”. In practice, this generally means anywhere you work for less than 24 months. So, for example, a nursing job that requires you to travel out to patients’ homes could end up making you eligible for a pretty decent tax refund. Meanwhile, travel expenses can also include some subsistence costs while you're on the move. Things like accommodation and food can all contribute toward your claim.

There are also a few tricky points to consider. If you're travelling to a number of hospitals or clinics within the same general area, with your mileage and travel times not changing much, HMRC might consider the entire region your “permanent workplace”. It's always best to get professional advice in situations like these.

Rotational contracts, where you're working full-time at a series of hospitals over a period of years usually won't qualify. However, if your training takes place under, for example, a single 5-year contract, then things changes. In that case, each hospital you work at will count as temporary because it's a single employment with multiple temporary workplaces. The regulations are easy to trip over here, so it's often a good idea to get professional help.

If you're already getting some of your costs reimbursed by your employer, you may still be owed tax back. HMRC has set rates for Approved Mileage Allowance Payments (AMAP), and if you're not getting the full amount you can claim back the difference. The NHS has its own rates as well, if you're employed by them.

Beyond travel, there are several more ways a job in healthcare can cost you money. If you’re paying out of your own pocket for repair, replacement or even laundry of your work uniform, for instance, you could make a claim for those costs. The same goes for union dues and professional body fees to organisations like the Nursing and Midwifery Council.

The key points to remember are that the costs you’re claiming tax relief for need to be essential to your work, and you need to be paying them yourself. In addition, to get back everything you’re owed you’ll need to show proof of what you’re spending. That means records and receipts – although the simplified Flat Rate Expenses system can offer an easier way if you don’t mind sticking to HMRC’s figures.

If you find yourself buying things like laptops or office equipment for work use, you might have a claim under HMRC’s capital allowances system. This is generally for items that you’ll be using for a couple of years or more – and again, you’ll need to be footing the bill yourself for them to qualify for tax relief.

Relocation and training costs?

You can often claim expenses when you have to relocate for training. Remember that it's not just the basic travel costs, either. Removal expenses, legal fees, subsistence and even the replacement of some domestic goods can all be eligible. Anything you claim for does need to be essential for your work, though. Also, as always, you do have to be footing the bills yourself. However, if you're being reimbursed, whatever your employer chips in is tax-exempt up to £8,000. It's important to keep receipts for all your expenses, of course, as you need to prove what you've spent to get any tax back.

Training and education expenses can be a tricky area to deal with when you're making a healthcare tax refund claim. As always, the basic rule of thumb is that courses need to be essential for your work to qualify for tax relief. Remember that we're talking about more than just the fees involved, of course. The money you spend travelling to a qualifying course or training session can also count toward your claim. This is one area where it's always worth talking to a professional. The training simply being compulsory isn't always enough to qualify its costs for tax relief. For instance, you might need to have completed certain courses in preparation for taking up a particular position. However, HMRC doesn't consider the cost of preparing for a role the same way as the cost of actually performing its duties.

Information you need for a healthcare tax rebate

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

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

If you decide to tackle your refund claim on your own, you can kick the process off on the HMRC website. Alternatively, you can have a tax professional get things moving on your behalf.

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 refund, 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 live. It’s had a massive impact on everyone. But those on the frontline, treating the sick and battling the infectious disease outbreak itself, are among those hardest hit.

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

When asked what areas of their life had deteriorated as a result of the COVID-19 crisis, healthcare workers said the following have impacted their health and wellbeing:

Those in the private sector were far more likely to report feeling insecure about their job (32%), than those in the public sector (5%). The private healthcare sector has been helping the NHS to provide extra capacity to fight the virus. In a deal that was the first of its kind, independent hospitals agreed to provide thousands of beds, ventilators and extra healthcare staff. These hospitals will be reimbursed at cost.

Many people will have found themselves working in different departments, or providing additional support which is outside of their usual role. Healthcare services have pulled together to provide the greatest care for those who need it – and many people think they should get greater recognition for it. Weekly clapping for NHS workers and carers has become a part of many family’s routines, but does it do enough?

In the Care fit for carers report, the following public attitudes on greater government support for health and care workers were gathered:

The report concluded with the recommendation that the government should introduce a COVID-19 pay bonus of 10% for all workers in health and care for 2020/21 to recognise how this sector has gone above and beyond.

What support has been available during COVID-19?

In our hour of greatest need, the NHS and social care system continues to be there for all of us. But who has been there for them?

In April, the NHS launched a hotline to support and advise healthcare staff during the coronavirus pandemic. Offering support outside the workplace, volunteers from charities have been listening to concerns and offering psychological support where possible.

The public have also been doing their best to provide support where possible. People have fundraised, celebrities have given huge sums of money and businesses have been giving freebies – there are loads of examples of how acts of kindness have been trying to lift the spirits of healthcare workers and make their lives easier and safer.

In The World Health Organization’s messages to support the mental health of healthcare workers back in March, they suggested the following:

Feeling under pressure is quite a normal feeling in the current situation. But if you do feel stressed, it is not a reflection that you can't do your job or that you are weak. During this time, it's as important to manage your mental health as it is to manage your physical health.
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.

Financial support

The following may help healthcare workers and their families through any financial hardship as a result of COVID-19.

Statutory sick pay

From 13 March, employees have been able to claim statutory sick pay (SSP) if they’ve been unable to work due to COVID-19. This includes those who are too ill to work, those who are self-isolating due to symptoms, and those in the ‘shielding’ group who have to stay at home due to their vulnerable status.

With SSP, you can get up to £94.25 a week. It can be paid by your employer for up to 28 weeks and will start on day one of you being unable to work, rather than the usual day four. From 20 March, people have been able to get an isolation note instead of a doctor's note by going to NHS 111 online and filling out a form.

For more information, check out GOV.UK.

Universal credit

You could also apply for Universal Credit. It’s a payment designed to help with your living costs if you’re on a low income, out of work or you cannot work. You could receive it on top of SSP as a top-up benefit, and you could also get it if you’ve been furloughed and are on a low income. The government has made temporary arrangements for those affected by COVID-19 to get the support they need, but they have seen huge increases in claims so it may take a while to process.

To find out more, check out GOV.UK’s guide to understanding Universal Credit.

Mortgage holidays

For many people, the mortgage is the biggest monthly outgoing. So if you have been experiencing difficulties trying to make these repayments because of COVID-19, you may be able to take a ‘mortgage holiday’ for three months. This basically means your repayments will be paused during that time, but you will still have to pay the same amount eventually.

Mortgage lenders have agreed with the government to offer these repayment holidays to any household facing financial hardship because of the current times. The best thing you can do is to contact your lender to find out a solution that works for you.

Landlords can also make use of a mortgage holiday if their tenants are having money worries too.

There’s additional reassurance for tenants, as the government has confirmed that you will not face the threat of eviction for at least three months if you’re having financial difficulties.

The job retention scheme

You may have heard of friends or family being furloughed, or perhaps you’ve been furloughed yourself. The scheme ensures businesses do not have to face tough decisions about losing staff. They’ve been able to claim back up to 80% of a furloughed employee’s wages, with a cap of £2,500 a month.

If you’ve been placed on the job retention scheme, you’ll have been asked to sign a form by your employer – but you don’t have to do anything else. You’ll still be paid by them. If the £2,500 cap is less than your usual pay, some employers have been making up the 20% difference. But they’re not required to do this.

The scheme has recently been extended to the end of October 2020, but companies will soon have to start contributing more At the time of writing, the furlough scheme will also allow staff to return part-time from August.

Support for the self-employed

Currently, the coronavirus support package for the UK’s self-employed workers is a taxable grant based on previous monthly earnings over the last three years. You could get up to 80% of earnings, and the grant is paid out in a single instalment covering 3 months. It is capped at £7,500 altogether. To qualify, you also have to have earnings of less than £50,000 a year.

Check your eligibility with GOV.UK.

Death in service

In recognition of the increased risk faced by staff during the crisis, a new life assurance scheme has been launched for eligible frontline health and care workers.

The families of workers who die from coronavirus in the course of their frontline essential work will receive a £60,000 lump sum. It’s worth roughly twice the average pension pay for NHS staff.

Support from nursing charities

There are many charities accepting applications for grants during the pandemic. For example, the Cavell Nurses' Trust offers support for short-term financial emergencies, including many situations which may arise as a result of coronavirus, including needing to self-isolate or if a partner’s income has been affected. Find out details on how to apply on their website.

You could also explore other charitable grants using Turn2us, which searches for benefits and grants you may be eligible for.

Tax Break For Healthcare Workers​