How to Claim Tax Relief for Employment Expenses in the UK

How to Claim Tax Relief for Employment Expenses in the UK

When You Qualify

As an employee, it’s not uncommon to spend your own money on job-related expenses, especially when you have a deadline to meet. However, you may be able to claim tax relief on your expenses if you incurred them while performing your duties as an employee. It’s also worth noting that expenses are deductible only if they are necessary.

Employers are expected to reimburse you for the expenses that you incur, but should they fail to do so, you may be able to claim tax relief. Expenses already reimbursed by your employer but was still subjected to tax can also be claimed including claims for previous tax years.

What You Can Claim

Work Clothing and Tools

If you work in certain environments such as factories, car repair shops, or construction sites, you may be subjected to protective clothing, gloves, and uniforms. The maintenance and replacement cost of these items are applicable for tax relief. However, you cannot claim relief on the initial cost of buying these items. How much you can claim depends on the actual amount you have spent. Hence, keeping receipts is very important because it’s an undeniable proof of expense.

Vehicles You Use for Work

Using your car for work can earn you tax relief and using the company’s car for work can also get you tax relief. Here’s how it works:

If you use your own vehicle to perform your duties as an employee, you may be able to claim tax relief on the approved mileage rate. This is inclusive of the cost of ownership and usage of vehicles. Other expenses like fuel, repairs, and road tax cannot be claimed separately. To know your exact tax relief amount, you need to keep records of dates and mileage, then you add the mileage for each vehicle type you used, and subtract all mileage allowances.

If you use your company’s vehicle, you can claim tax relief on the money you spent on fuel and electricity while performing your duties. You need to have proper records to show the actual cost of these items.

Travelling Expenses

If an employee has to travel out of town or country for the sake of performing official duties, they can claim tax relief. Tax relief applies to costs such as public transport, parking fees, food, phone calls, and accommodation. You may also be able to claim tax relief on business mileage. Note that travelling to and from work is not claimable unless you’re travelling to a place of work, and if your employer meets some but not all of the cost, the deduction claimed must be reduced by the amount reimbursed by the employer.

Capital Allowances

If you purchase equipment like a laptop or computer for the purpose of your work, you may be able to claim capital allowance tax relief. This relief cannot be claimed for cars, motorcycles, and bicycles.

Work from Home Expenses

It’s one thing to choose to work from home and it’s another to work from home because you have to. You cannot claim tax relief if you choose to work from home, but you can claim expenses that have to do with work. You cannot claim relief on the money you spend on both private and business use, for example, rent. However, you can claim tax relief for business phone calls and extra cost of electricity for your work area.

Effective from the 6th of April, 2020 your employer can pay you up to £6 a week (£26 monthly) for additional costs if you have to work from home. For previous tax years not paid, the rate is £4 a week (£18 monthly).

Fees and Subscriptions

Working for a company requires you to have the knowledge and certifications necessary to carry out your work. However, you may find yourself short and might need to pay a certain fee to be a member of an approved organisation or write professional examinations. These fees can be claimed on tax relief so long as they are necessary for your work.

You need to note that the organisation you subscribed to must be on the HMRC approved list. Tax relief cannot be claimed on life membership subscriptions or subscriptions paid by your employer.

How to Claim Tax Relief

There are numerous ways to make a claim. You can make a claim using HM Revenue and Customs (HMRC) online service, by post on form P87, on phone, and via the self-assessment return.

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