How to claim tax relief for your job expenses in the UK

Navigating the world of taxation frequently seems like a challenging task, mainly when comprehending what job expenses are eligible for tax relief and how to claim them.

In the UK, tax relief on employment expenses is an invaluable advantage that can substantially lower your tax bill, provided you know the ins and outs of the procedure.

This thorough overview clarifies the path for UK employees seeking tax relief on their job expenses.

Table of contents

What tax reliefs are available for your work expenses in the UK

1. Claiming for work-from-home expenses

If you need to operate from home, you can claim tax relief on additional household costs like business phone calls and electricity and gas for your work area, but not for costs that are utilised for private as well as business use, like rent or internet access.

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A fixed rate of £6 a week can be claimed without requiring the submission of evidence, but for any amount above this, you must maintain receipts or agreements. The rate you pay tax is then used to grant tax relief.

2. Travel expenses

For those whose duties include travel, tax relief may be pertinent for expenses incurred on business travel. This covers the price of lodging, meals, and transportation. Keeping precise documents is essential for verifying these claims.

3. Purchasing other equipment

You can claim tax relief on the entire price of significant equipment like machines necessary for your job, which can be classified as the annual investment allowance.

You cannot claim for automobiles, motorbikes, or bicycles but may claim business mileage and fuel expenses. Small items that will last less than two years, like tools, are claimed differently.

4. Professional costs and subscriptions

If you have to pay a professional charge to be able to do the work and you meet the expenses yourself, you can claim a deduction.

Any subscriptions you pay to recognised professional associations or academic societies on HMRC’s list are also eligible for a deduction.

5. Work clothing and tools

If you put on specialist clothing to do your job, you can claim the cost of repairing, cleaning, or replacing that clothing. But you are not allowed to deduct the initial expense.

Similarly, you can claim a deduction for replacing or fixing any small tools you require to do your job, which you offer yourself, but not the initial expense of those tools.

How to claim tax relief?

1. Supporting your statements

You must back up your claims with appropriate proof when claiming tax relief. Keeping documents is essential, as they prove the actual expenses incurred. If you don’t have invoices, bank statements demonstrating the transactions can also be used.

To submit mileage claims, record your work-related travels, including dates and miles. If you claim more than the fixed rate for work-related expenses, you must provide evidence of calculating the additional costs.

2. Keep meticulous records

Maintaining detailed records is essential. Keep all relevant receipts, invoices, and documents related to eligible expenses. This documentation serves as evidence when making a claim and helps substantiate the legitimacy of the expenses.

3. Determine the appropriate tax relief

Different tax relief programs cover extra expenses. For instance, there are differences in the rules that apply to the claim of travel expenses and expenses incurred when working remotely. Recognise the particular rules that apply to each type of expenditure.

4. Filling out the P87 form

Generally, the P87 form claims tax relief on expenses for individuals who do not file a self-assessment tax return. It’s accessible online and requires details about your income and personal expenses.

Fill out the form precisely and be ready to provide additional proof if requested.

5. Claiming online

The digital era has made filing for tax relief more efficient. The online portal of the tax authority is easy to use and provides step-by-step instructions for filing claims.

You must have your password and Government Gateway user ID to use the service. After logging in, you can complete the required fields, attach any digital supporting documents, and send in your claim.

6. Submit claims on time

It is essential to meet deadlines. Ensure your tax relief claims are filed in the allotted amount of time. In certain situations, penalties may be applied, and missing deadlines may result in the forfeiture of possible relief.

7. Review HMRC guidelines

Monitor HMRC guidelines for any updates or modifications to tax relief policies. The tax legislation is constantly changing, so keeping up with the latest changes will guarantee that you are aware of any implications for your eligibility for relief.

8. Keep communication open

If you’re unsure or your employment or financial circumstances have changed, think about contacting HMRC or a tax expert for clarification. You will receive accurate guidance customised to your unique situation if there is open communication.

9. Monitor tax refunds

Track the status of your tax refund once submitted. Generally, HMRC processes claims and pays out reimbursements in a predetermined time. Tracking and following up with HMRC, when needed, ensures that you get the relief to which you are legally entitled as soon as possible.

10. Seek expert advice

Navigating the intricacies of tax reduction can be difficult. Professional advice is recommended if you are uncertain or dealing with complicated financial situations.

Tax professionals can offer personalised guidance, guaranteeing that all eligible costs are considered, and the claim is precise and compliant.

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Final thoughts

Claiming tax relief is the same as making wise financial decisions. It involves using online resources, maintaining accurate records, and possibly consulting professionals for guidance.

By staying on top of deadlines and understanding the allowable expenses for employees HMRC, you can ensure you get all the relief you’re entitled to. It’s not just about money; it’s a clever approach to building a stronger financial future in a tax year.

Thus, remember that paying taxes is an investment in your wallet’s well-being rather than just a hassle!

123Financials Editorial Team
The 123Financials editorial team is composed of seasoned finance and accounting experts with a combined experience of over 20 years. Specializing in UK finance, accounting, and tax-related content, our team is dedicated to delivering insightful and practical advice to startups and small businesses. With a strong background in both the theoretical and practical aspects of financial management, we ensure that our readers stay informed and empowered to make sound financial decisions. Whether it’s navigating the complexities of UK tax laws or providing strategic financial planning tips, our team is committed to excellence and accuracy in every article.