Work Related Expenses

There are certain job expenses that are tax free for all employees.

If you own your own company, then your company can pay, or you can ask your company to reimburse you.  This is tax and national insurance free income for you and the company can claim corporation tax relief and maybe the VAT if you have provided the receipts and it is VAT registered – most tax efficient.

Employers could offer to pay or reimburse employees as part of their employment package – maybe as an extra goodwill gesture instead of a higher pay rise, and more tax efficient than a pay rise as it saves on national insurance, and there may be a VAT benefit too.

But if the employer underpays or does not pay, then the employee can claim tax relief on these job expenses on a personal tax return or direct from HMRC, and back date that claim by up to 4 years.

HMRC have helpfully set a up an online claim system at

https://www.gov.uk/guidance/claim-income-tax-relief-for-your-employment-expenses-p87

These job expenses are: –

Working from home

– only if you have to work from home e.g. employer does not have an office, or it may be specified in your contract

– £6 per week without receipts or additional household costs e.g. gas & electricity

– during COVID i.e. for tax years ended 5^th April 2021 and 5^th April 2022, you were entitled to full 52 weeks allowance of £312 even if you only had to work from home for 1 day that year.  This concession has now ended but is within the 4 years you can back claim.

Uniform, Work Clothing & Tools

• A uniform identifies you as having a certain occupation.
• Work clothing is specialist clothing you need for work e.g. overalls or safety boots.
• This excludes PPE as that must be paid for or reimbursed by the employer.
• Tools are those you need for work.
• Cleaning, repairing, or replacing.
• Some industries have an agreed flat rate allowance e.g. Nurses, Pilots
• Check out your industry allowance at https://www.gov.uk/guidance/job-expenses-for-uniforms-work-clothing-and-tools

Mileage

• Logged work journeys – not home to work.
• In your own vehicle – not company vehicle
• In a car or van – 45p per mile for first 10,000 mile and 25p thereafter
• On a motorcycle – 24p per mile
• On a bicycle – 20p per mile
• Less what has been reimbursed by the employer.

Professional fees & subscriptions

• Professional membership fees – if needed to do your job
• Annual subscriptions to HMRC approved bodies and learned societies.
• For this HMRC list see https://www.gov.uk/government/publications/professional-bodies-approved-for-tax-relief-list-3/approved-professional-organisations-and-learned-societies
• Not life membership

Travel & overnight expenses

• There are flat rate allowances you can use to claim via your employer but if your employer has not reimbursed you, then only receipted costs are allowable.
• Travel, accommodation, and meals

Equipment

• That you need for work e.g. a computer.
• But has no significant private use.

Please note that HMRC are more likely to question if the costs are really job related when the employer has not reimbursed such costs.

If you would like any assistance with expense or other employee benefits, then do call for a chat.