Employment expenses you may be missing out onTax
As the cost of living continues to increase, many people across the country are reviewing their spending to see how they can dampen the impact.
Each year, the average UK person’s income will be subject to Income Tax through pay as you earn (PAYE) or through self-assessment, but you might be surprised to hear that you may be able to claim a tax refund.
A claim must be made within four years of the end of the tax year that the money was initially spent. So, you could be able to claim expenses as far back as the 2018/19 tax year as long as the claim is made by 5 April 2023.
With the 2021/22 tax year recently coming to a close, here are some expenses that you should consider whether you would be eligible to claim for when providing us with your tax return information.
Working from home
Owing to the COVID-19 pandemic, the majority of UK workers were told to work from home if they were able to. If you had to work from home for all or part of the week, you are eligible to claim HMRC’s simplified working from home expense of £6 a week.
If you believe that your additional costs for working from home exceeded £6 a week, you can claim the exact costs incurred but should keep evidence such as receipts, bills or contracts just in case HMRC requests that you provide evidence for these expenses.
You cannot claim this expense if you chose to work from home or were paid a tax-free amount by your employer to cover working from home expenses. If this tax-free amount was below £6 per week, then you can claim the difference.
Uniform and work clothing
A uniform is a set of specialised clothing that’s recognisable as identifying someone as having a particular occupation (e.g. nurse or police uniforms). A uniform is not clothing of a similar design or colour that you must wear for work.
If you personally clean your work uniform and your employer doesn’t already offer a laundering service or reimburse you for this, you could claim tax relief. The amount you can claim depends on your job and the industry you work in.
Please check HMRC’s ' List of industries and occupations ' table to see if the industry you work in is shown. If your industry and occupation is not shown, you are able to claim a deduction of £60.
You cannot claim tax relief for personal protection equipment (PPE). If your employment requires PPE, your employer should either provide you with this free of charge or ask you to purchase the PPE and reimburse you the costs.
You can also claim tax relief on work expenses of repairing or replacing your small tools. If your employer pays towards your expenses, deduct the amount they pay to get the figure that you can claim.
Vehicles you use for work
You may be able to claim tax relief if you use your car, van, motorcycle or bicycle for work purposes. This does not include normal commuting unless you are travelling to and from a temporary place of work and the amount you can claim depends on whether you’re using your own vehicle or a company vehicle.
A temporary place of work is somewhere you as the employee goes only to perform a task of limited duration or for a temporary purpose.
If you are unsure whether your place of work is temporary or not, please provide us with a brief explanation of your employment situation so we can ascertain whether your workplace is temporary or not.
Using your own vehicle
If you use your own vehicle for work purposes, you are able to claim tax relief on HMRC’s approved mileage rates seen below. These rates cover the cost of running and maintaining your vehicle, so you will not be able to claim separate costs such as insurance, fuel or MOTs, etc.
You will need to keep records of the dates and mileage of your work journeys and deduct any amount that your employer may pay towards your mileage costs.
HMRC Approved Mileage Rates as of 6 April 2022
|Vehicle type||First 10,000 business miles in the tax year||Each business mile over 10,000 in the tax year|
|Cars and vans||45p||25p|
Using a company vehicle
If you use a company vehicle and spend your own money on fuel or electricity for business trips in your company car.
You can claim tax relief on any money you spend on fuel or electricity for business trips in your company car. You must keep records to show the costs of the fuel and if your employer reimburses some of the money, you can still claim tax relief on the difference.
Professional fees and subscriptions
You may be able to claim tax relief if you are required to pay professional fees or subscriptions in order for you to do your job.
You are not able to claim tax relief on lifetime membership subscriptions, or for professional membership fees or annual subscriptions if you did not pay for it yourself or if the professional organisation is not on HMRC's list of approved bodies or learned societies .
Travel and overnight expenses
As we slowly begin to return to normal, you may have been required to travel for work. This means you may be able to claim tax relief for money you’ve spent on things like public transport costs, hotel accommodation if you’ve had to stay overnight, reasonable costs for food and drink, congestion charges and tolls, parking fees or business phone calls and printing costs.
You will not be able to make a claim for normal commuting unless you are travelling to a temporary place of work. If your employer has reimbursed part of the money spent, you are able to claim the difference.
Buying other equipment for work
In most cases, you can claim tax relief on the full cost of substantial equipment used for work, as long as there is no significant private use and the equipment is purchased wholly, exclusively and necessarily for the purpose of your employment.
For example, if your work requires you to purchase a computer and you do not use it outside of work purposes, you will be able to claim this expense.
You can only claim tax relief for equipment expenses if it is both required for you to do your job and you use the equipment for work with no significant private use.
If your employer has reimbursed part of the money spent, you are able to claim the difference.
As detailed, there are a number of expenses that can potentially qualify for tax relief. With the cost of living rising it is worth considering if you are claiming relief for your allowable costs.