Tax relief for employees

If you are an employee you may be entitled to claim tax relief on certain qualifying expenses. You can do this even if you don’t have to fill in a tax return and HMRC may also allow you to make a claim for these expenses in the last four years that you were employed. Have I got your attention now?

Below are the most common expenses that HMRC allow you to claim for but if the expense is ‘incurred wholly, exclusively & necessarily in the performance of your work duties it is likely to also be allowed:

Using your own car for work journeys

1) If your employer doesn’t allow you to claim for mileage when you use your own car for a work related journey you can make a claim for tax relief based on the number of qualifying miles you have done in a tax year.

2) If your employer does pay for you work miles you may still be able to make a claim but only if the amount they pay you it is not the approved mileage allowance that HMRC set. These rates are currently £0.45p for the first 10,000 miles in a year and £0.25p thereafter. Rates for motorcycles, bicycles and carrying passengers can be found at Travel – Mileage and Fuel Allowances

Business Trips

If you are working away and have to pay the accommodation and meal costs yourself, you can make a claim based on how much you spend.

Professional or trade subscriptions

If you bear the cost of these and it relates to the work you do, you can claim for this cost.

Tools or equipment

If you have purchased any tools or equipment that you use for mainly your work duties you will be entitled to some tax relief. To get the relief you will need to keep a copy of the invoice to prove the amount you have spent.

If you do not have the invoice you may still be able to make a claim for the repair and replacement of the item by claiming a flat rate expense. These expenses are negotiated between HMRC and trade unions and only apply to certain classes of manual employees. The amount you can claim and list of employee classes are listed at http://www.hmrc.gov.uk/manuals/eimanual/eim32712.htm

Uniforms & protective clothing

1) Tax relief is allowed for clothing that is recognisably a uniform or part of a uniform which you are required to wear for work and must bear the cost yourself. If your employer pays for your uniform you are still entitled to relief for the upkeep of it i.e. for keeping it clean. If you pay for laundry costs then this is the amount you can claim but if you wash your uniform at home HMRC currently accept that £60 per year is a reasonable estimate of the additional costs you incur. The amount for nurses is £100.

2) Protective clothing is also an allowable expense provided that it is worn mainly during work hours and is needed for the protection for the job you do. Again tax relief is available for the upkeep.

Working from home

If you work either at home or from home you may be able to get tax relief on some of your household expenses. HMRC allow £208 to be claimed without the need for you to keep any records. If you have a separately identifiable office at home and believe that your utility costs have increased more than this amount you will need to provide such evidence to make your claim.

You can make your claim by writing a letter to HMRC if your expenses for a year do not exceed £1,000. Form P87 is used if your expenses do not total £2,500 but any more than this you will be required to complete a self-assessment tax return. Unfortunately HMRC will not simply send you a cheque for your tax refund but they will amend your tax code so that you pay less tax through PAYE.

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