Income Tax Reliefs for Job-Related Expenses can be claimed for on-the-job expenses only if you have spent money from your pocket to purchase the things required for your job. Remember, these things should be used only for work-related purposes. If your employer has paid for the things or refunded the money, or you want an alternative to the one the employer offered, you cannot claim tax relief.
The HM Revenue and Customs (HMRC) in the UK defines Income Tax Reliefs for Your Job-Related Expenses as deductions that can be claimed against taxable income for expenses incurred as part of one’s employment. These reliefs are aimed at reducing the tax burden on individuals by allowing them to offset certain costs associated with their job duties. It’s important to note that not all expenses are eligible for relief, and specific criteria must be met for a claim to be valid.
Income Tax: What Expenses Can I Claim if I’m Self-Employed?
Claim Tax Relief for Your Job Expenses
Tax relief can be claimed when you have paid tax in the applicable financial year. It is calculated based on the money spent and the applicable tax rate. The claim should not exceed the tax paid.
How to Claim Income Tax Reliefs for Job-Related Expenses?
In all applicable cases, you must first check your eligibility and then file the claim accordingly.
In most cases, eligible persons can claim tax relief online. If not, a claim can be filed via a postal form. If there is a difference between the estimated amount and the actual amount paid as the tax year ends, you must inform the HMRC.
What Things Can You Claim For with Income Tax Reliefs for Job-Related Expenses ?
- Working From Home
You can claim relief for certain household costs if you work from home. Working from home means either you are required to be away from the office due to your work or your company does not have an office.
If there is an office but you do not go there at times, you cannot claim tax relief. Also, if you work from home due to coronavirus or as per your employment contract, you are allowed to work from home at times or permanently.
Things that you can claim tax relief for should be related to work, like phone calls related to office work or the use of electricity or gas related to work. Things used for private and office work, such as rent or the Internet, cannot be claimed for tax relief.
The tax relief amount is £6 a week (applicable since April 6, 2020), and the exact cost you have incurred over and above your weekly amount. You will not need evidence for the former, but for the latter, you need to produce receipts, invoices, and contracts. Tax relief will depend on the tax deduction for work-related expenses.
- Uniforms, Work Clothing, and Tools
Under this section, you can claim Income Tax Reliefs for Job-Related Expenses related to uniforms, tools, and work clothing. You can claim relief if you have bought repairing or replacing tools for your job-related work, like an electric drill, scissors, etc. You can also claim relief if you buy a uniform for cleaning, repairing, or replacing uniforms.
A uniform can be defined as overalls or a set of clothing meant for certain occupations, such as police or nurse. You may sometimes wear specialist clothing for work, even though it may not be identified with certain occupations, such as safety boots.
However, you cannot claim tax relief for everyday clothing that needs cleaning, repairing, or replacing for work, the laundering cost of the uniform, or specialist clothing when the employer offers free laundry and you opt out of it. You can also not claim the initial cost of purchasing such clothing.
Personal Protective Equipment (PPE)
If you are required to wear PPE at your workplace, and your employer provides you with the same free of cost, or you initially buy it and get reimbursed later, you cannot claim tax relief.
However, if you buy the PPE, you can claim tax relief on the amount spent (if you have not been reimbursed). In this case, you will need to provide receipts, fill in the P87 form, and send it by post to HMRC. You can also apply online for a flat-rate expense or an agreed amount.
- Vehicles You Use for Work
If you use vehicles for work-related purposes like bicycles, motorcycles, cars, vans, etc. However, you cannot claim for travel to and fro from work. You can claim tax relief if you have bought a vehicle or leased it from your pocket. You can also claim tax relief for a company vehicle. Claims can be made for the current tax year as well as for previous years, up to four years.
Using Your Own Vehicle For Work
Tax relief for using your own vehicle can be claimed based on the mileage rate covering costs related to running and owning the vehicle. Separate claims for fuel, vehicle tax, etc., cannot be made. You just maintain proper records of the mileage date-wise, add the mileage for each vehicle, and deduct the amount reimbursed by your employer as mileage allowance.
The approved mileage rate for your own vehicle is as follows –
- For cars and vans, it is 45p for the first 10,000 business miles and 25p for business miles exceeding 10,000 during the tax year.
- For motorcycles, it is 24p for the first 10,000 and 10,000+ business miles during the tax year.
- For cycles, it is 20p for the first 10,000 and 10,000+ business miles during the tax year.
Using Company Vehicle For Work
If you are using a company vehicle for work, for example, business trips, you can get tax relief for job expenses, like fuel and electricity. It would help if you kept the original receipts to claim relief. In case the employer has reimbursed a specific value, you can get relief on the difference.
- Professional Fees and Subscriptions
When you pay a membership fee or a subscription to an approved professional association or society to support your job-related work or one relevant to your professional work, you can claim relief for tax deductions for work-related expenses.
Relief on tax deduction cannot be claimed on subscriptions or memberships if your employer has paid for it or the organization is not a part of HMRC’s approved list. You will need to speak to the relevant department in your organisation to find out how much you can claim back. The relief can be claimed for the current tax year and 4 years previously.
- Travel and Overnight Expenses
Traveling for work and staying overnight at the place means that you can get tax relief on the job expense. The travel expenses to and from work cannot be claimed. However, you can claim the stay and the food as overnight expenses. Other things that you can claim tax relief for in this category are – food and drinks, hotel stays, parking fees, toll and congestion charges, public transport costs, printing, and business phone call charges.
In the case of hotel accommodation and food and drinks, you will have to support your claim with original receipts clearly stating the date and the name of the hotel or restaurant.
The tax relief claim can be made for the current year and the previous four years.
- Buying Other Equipment
If you have invested your money to buy any substantial equipment for work, you can claim tax relief. Common examples of such equipment include computers, printers, etc. Expenses on such equipment qualify as an annual investment allowance, a type of capital allowance.
However, if you buy cars, motorcycles, or bicycles and you use the same for work purposes, you cannot claim capital allowances. Tax reliefs for vehicles can be claimed as a tax relief job expense under business mileage. If the equipment is a smaller item with an expiry of two years or less, you can get tax relief in other ways (read above).
In the case of equipment expense, the claim is valid only if it is a must requirement for your job and it is used for work purposes. It cannot be used for private use and should be used only as per the oganisation’s policy. If the money is reimbursed by the employer, you cannot claim tax relief. If the reimbursement is partial, you have to subtract the reimbursed amount from the total while claiming relief.
Watch this video about Income Tax Reliefs for Job-Related Expenses
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