Tax relief for employees

There are several expenses that you are able to claim against tax as an employee. Every year we help thousands of taxpayers save thousands by claiming expenses that they weren’t previously aware of.

In order to claim expenses you must have paid tax in the year the expense was incurred. Relief can only be claimed on expenses that are exclusively work-related. 

You cannot claim relief on things you’ve spent money on if your employer has already provided you with an alternative. In order to claim tax relief you must keep records of the expenditure within 4 years of the end of the tax year that the money was spent.

How to claim expenses as an employee

The route you should take in claiming tax relief on expenses is determined by the amount you are claiming for.

Claims up to £2,500

You should make your claim:

·       using a Self Assessment tax return if you already fill one in

·       online or by printing and posting form P87 if you don’t already fill in a tax return

·       by phone if you’ve had a successful claim in a previous year and your expenses are less than £1,000 (or £2,500 for professional fees and subscriptions)

If your claim is £2,500 or less for the tax year, HM Revenue and Customs (HMRC) will usually make any adjustments needed through your tax code for the current tax year.

If you claim an estimated amount, HMRC will review it at the end of the tax year and make any adjustments needed through your tax code for the following year.

Claims over £2,500

You can only claim using a Self Assessment tax return. You need to register if you don’t already fill one in.

You’ll get a letter telling you what to do next after you’ve registered.

If your claim is over £2,500 for the tax year, HMRC will give you relief through your tax code for the current and next tax years, and will send you a tax return to fill in.

They will also check your tax calculation for the previous year.

What can you claim?

Uniforms, work clothing and tools

You may be entitle to claim tax relief on the cost of repairs or replacing small tools you need to do your job, or on the cleaning, repairing or replacing of specialist clothing. However you cannot claim relief on the initial cost of small tools or clothing for work.

If you need to buy other equipment to use in your job, you may be able to claim it as a capital allowance instead.

Business mileage, fuel and electricity costs

You may be able to claim tax relief on fuel or electricity you use on business.

Using your own vehicle

If you use your own vehicle for business, you may be able to claim ‘Mileage Allowance Relief’.

To work out how much tax relief you can claim, add up your business mileage for the tax year and multiply it by the approved mileage rates.

If your employer doesn’t pay you a mileage allowance you can claim the full approved amount of Mileage Allowance Relief.

If your employer pays you a mileage allowance but it is less than the approved amount, you can claim Mileage Allowance Relief on the difference.

If your employer pays you more than the approved amount you’ll have to pay tax on the difference.

Using a company car for business

 

You can claim tax relief on the money you’ve spent on fuel or electricity for business trips in your company car. Keep records to show the actual cost of the fuel or electricity you’ve bought or used.

If your employer reimburses only some of the money, you can claim relief on the difference.

Travel and overnight expenses

If your work involves travel and overnight trips you can claim tax relief on your ‘subsistence’.

Expenses you can claim tax relief on from your business journey include:

·       Public transport costs

·       Hotel accommodation if you have to stay overnight

·       Food and drink

·       Congestion charges and tolls

·       Parking fees

·       Business phone calls, fax and photocopying costs

You cannot claim expenses for travelling to work unless it is a temporary place of work.

7. Professional fees and subscriptions

You can reclaim tax on fees or subscriptions you pay to some approved professional organisations - but only if you must have membership to do your job or it’s helpful for your work.

You can’t claim tax back on fees or subscriptions you’ve paid to professional organisations not approved by HM Revenue and Customs (HMRC), or for:

·      Life membership subscriptions

·      Fees or subscriptions you haven’t paid for yourself (for example, if your employer has paid for them)

Your organisation can tell you how much tax you’re allowed to claim back.