Pharmacist tax deductible expenses can include professional registration fees, approved subscriptions, indemnity insurance, relevant training and certain travel and equipment costs. What you can claim depends on whether you’re employed or self-employed, and not every pharmacist can claim every expense. Employed pharmacists face stricter rules than locums and other self-employed pharmacists, so it helps to understand which rules apply to you.
Do Employed and Self-Employed Pharmacists Claim Differently?
Yes, and it’s the most important thing to get right.
If you’re employed and paid through PAYE, you can only claim an expense if you incurred it “wholly, exclusively and necessarily” in doing your job, and your employer hasn’t reimbursed it. That’s a strict test, and plenty of everyday costs don’t meet it.
If you’re self-employed, for example as a locum, you deduct allowable business expenses from your income and pay tax on the profit that’s left. The test is that the cost is wholly and exclusively for your business, which is easier to meet. You claim through your Self Assessment return.
If you work through your own limited company, different rules apply, so speak to your accountant.
What Can Employed Pharmacists Claim?
Professional registration fees. The General Pharmaceutical Council (GPhC) is on HMRC’s approved list of professional bodies (known as List 3), so tax relief is available on the fee to stay on the Register. You must have paid it yourself. If your employer pays or reimburses it, there’s nothing to claim.
Other professional subscriptions. Memberships of other bodies only qualify if they’re on HMRC’s List 3 and relevant to your job. Check the list before you claim.
Travel. Ordinary commuting to your usual pharmacy isn’t claimable. Travel between workplaces, or to a temporary workplace, may be if your employer doesn’t cover it.
Equipment, training and indemnity. These are harder to claim. Relief generally only applies if the cost was necessary to do your job and wasn’t reimbursed. Many employers provide indemnity cover and fund CPD, so check what’s already covered.
If you’re not already in Self Assessment, you can claim online through HMRC when your total is £2,500 or less in a tax year. Larger claims, or any claim if you already file a return, go through Self Assessment. For official guidance on claiming tax relief for work-related costs, see HMRC’s guidance on tax relief for employees.
What Pharmacist Tax Deductible Expenses Can Self-Employed and Locum Pharmacists Claim?
If you’re self-employed, you can claim costs that are wholly and exclusively for the business. For pharmacists, that commonly includes:
- GPhC registration fee, claimed as an expense on your return
- Professional indemnity insurance
- Professional subscriptions and memberships related to your work
- CPD and training that keeps your existing skills up to date
- Travel to temporary workplaces, such as between shifts at different pharmacies, but not ordinary commuting
- Equipment and supplies you use for work, such as reference materials
- Accountancy fees, phone costs and other running costs, based on business use
If you use something for both business and personal reasons, you can only claim the business share. Whether travel counts as commuting can depend on how regularly you work at the same pharmacy, so check your own pattern of work.
Equipment can be treated differently depending on how you account for your income. Some purchases are claimed straight away, while others go through capital allowances.
There’s also a £1,000 trading allowance, which you can use instead of claiming actual expenses (you can’t use both). It usually only makes sense if your costs are low, and it doesn’t apply to income earned through a limited company.
Why Keep Receipts and Records?
Because HMRC can ask you to back up any claim. Employed pharmacists are generally asked for evidence such as receipts or bank statements when they claim. Self-employed pharmacists need records to support every figure on their return.
Keep:
- Receipts and invoices for fees, training and equipment
- Insurance documents and renewal notices
- A mileage log showing the date, route and reason for business journeys
- Bank or card statements showing what you paid
- Notes on any costs shared between work and personal use
Self-employed people must normally keep business records for at least five years after the 31 January Self Assessment deadline for that tax year. Keeping them as you go is far easier than hunting for them at year end.
At Magnum Accountancy, we help pharmacists work out what they can claim and keep their records simple. Every situation is different, so if you’re unsure whether something qualifies, it’s best to ask before it goes on a return.