As an employee, you might find that you incur certain expenses while doing your job. The good news is that you may be entitled to claim tax relief on some of these costs, helping to ease the financial burden. But what exactly can you claim, and how does it all work? Let’s break down the rules to make it clearer.
Understanding employee expenses
When you spend your own money on costs related to your job, you might be eligible for tax relief. However, the expenses must be “wholly, exclusively, and necessarily” incurred in the performance of your duties. In other words, you can’t claim for anything that’s personal or optional.
What expenses can you claim?
Here’s a list of the most common expenses that employees can claim:
- Travel expenses
- If you travel for work (excluding your normal commute), you can claim back costs such as public transport fares, or mileage if you use your own vehicle.
- Keep in mind, travel between your home and your regular place of work is not eligible – it’s only for journeys that are part of your job.
- Subsistence costs (meals and accommodation)
- If you’re required to work away, you can claim expenses for accommodation, meals, and even things like a cup of coffee or snacks while travelling.
- These claims must be reasonable and should reflect what you’ve actually spent, so no splurging on luxury hotels!
- Professional fees and subscriptions
- If you’re a member of a professional body relevant to your job, you can claim tax relief on the membership fees, provided it’s an approved body by HMRC. This includes unions and other professional organisations.
- Keep in mind, it only applies if your membership is necessary for your role or helps you perform your duties.
- Uniforms and work clothing
- You can claim for the cost of repairing, replacing, or cleaning a uniform or specialised work clothing. This includes protective clothing (like safety boots or helmets) that you need to wear for your job.
- Note that everyday clothing, even if you only wear it for work, doesn’t qualify – it must be something you wouldn’t wear outside of work.
- Working from home expenses
- If you’re required to work from home, you can claim a proportion of the costs related to utilities, internet, and phone usage. HMRC offers a flat rate of £6 per week, or you can claim a higher amount if you have records to prove the actual costs incurred.
- Tools and equipment
- If you need to buy, repair, or replace tools or equipment specifically for your job, you can claim back the costs. However, this doesn’t include items that are also used for personal reasons.
- Business phone calls
- While you can’t claim the line rental or cost of your phone, you can claim back the cost of any work-related calls made from your personal phone.
How to claim employee expenses
There are a few ways to claim expenses, depending on your situation:
- Via Your employer: In many cases, your employer will reimburse you directly. If they do, you won’t need to worry about claiming tax relief separately.
- Through HMRC: If your employer doesn’t reimburse you, you can claim tax relief directly from HMRC. You can do this online through the HMRC website, or by filling in a form P87 if the amount is less than £2,500 a year. If it’s more than this, you’ll need to include the expenses on your Self Assessment tax return.
Important things to remember
- Keep records: Always keep receipts and records of your expenses, as HMRC may ask to see proof of your claims.
- Claim within the time limit: You can claim expenses going back up to 4 years, but don’t leave it too long, or you might miss out!
What can’t you claim?
It’s just as important to know what you can’t claim. Here are some examples:
- Commuting costs between home and your regular place of work
- Everyday clothing, even if you wear it only for work
- Expenses that have already been reimbursed by your employer
Final thoughts
Claiming employee expenses can make a real difference to your finances, but it’s essential to understand what you’re entitled to and how to go about it correctly. If you’re ever unsure, consider reaching out to a tax professional who can help guide you through the process and ensure you’re claiming everything you’re entitled to.