Navigating the world of tax relief can feel daunting, especially for employees trying to understand what they’re entitled to claim back. Knowing the types of expenses eligible for tax relief can help ensure that you are not overpaying.
In this article, we’ll break down everything you need to know about claiming back taxes as an employee, offering clear steps and practical insights.
Whether it’s work-related expenses or overpaid taxes, we’ll guide you through the process to ensure you don’t miss out on valuable deductions.
What Travel Expenses Can Employees Claim for Tax Relief?
Employees can claim tax relief on certain travel expenses incurred during the performance of their job, as long as the travel is for work-related purposes and not for regular commuting. HMRC allows deductions for journeys that are “wholly and exclusively” necessary for work, which typically includes:
1. Business Travel: Trips to temporary workplaces, client meetings, or training sessions required for the job.
2. Use of Personal Vehicle: Mileage expenses when using a personal car, van, motorcycle, or bicycle for work-related travel. HMRC sets specific mileage rates for tax relief:
- 45p per mile for cars and vans (up to 10,000 miles, then 25p per mile thereafter).
- 24p per mile for motorcycles.
- 20p per mile for bicycles.
3. Public Transport Costs: Expenses for trains, buses, taxis, or other transport modes used for work trips.
4. Non-claimable Travel Costs: Ordinary commuting expenses between an employee’s home and their regular workplace are not eligible for tax relief.
To claim travel-related tax relief, employees should maintain detailed records of journeys, including dates, destinations, and mileage (if applicable).
Claims can be submitted via Form P87 or through Self Assessment, and any reimbursements from employers must be excluded from the total claim.
Are Professional Fees and Subscriptions Tax-Deductible?
Employees can claim tax relief on professional fees and subscriptions, but only if they are necessary for their job and meet specific HMRC requirements.
These costs must be directly related to the individual’s ability to carry out their work effectively and must not be reimbursed by the employer.
Eligible Claims Include:
- Membership Fees: Subscriptions to professional bodies or trade unions where membership is essential for the job. For instance, engineers may claim subscriptions to The Institution of Civil Engineers, or accountants may claim for The Association of Chartered Certified Accountants (ACCA).
- Statutory Fees: Costs associated with maintaining a license to practice in certain fields, such as healthcare or law.
Non-Eligible Claims:
- Subscriptions to organizations not approved by HMRC, even if they are work-related.
- Fees that provide personal benefits, such as access to leisure facilities or non-essential services.
HMRC maintains an approved list of professional bodies and organizations for which tax relief can be claimed. Employees can check this list to verify eligibility before submitting claims.
What Can I Claim Back on Tax as an Employee?
Understanding the range of expenses employees can claim back on tax is crucial for ensuring they are not overpaying. In the UK, HMRC allows employees to claim tax relief on a variety of job-related costs, provided they meet specific criteria. The expense must be:
- Wholly, Exclusively, and Necessarily incurred for the purpose of their job.
- Not Reimbursed by the employer.
Common Claimable Expenses:
- Uniform and Work Clothing: Cleaning or replacing required uniforms or protective clothing.
- Travel Costs: Business travel to temporary workplaces or work-related errands.
- Professional Subscriptions: Membership fees to approved professional bodies or organizations.
- Tools and Equipment: Necessary items purchased by the employee for their job.
- Work-from-Home Costs: Increased utility bills or broadband expenses for employees working remotely.
- Training and Courses: Costs for work-related courses, workshops, or training programs that improve skills necessary for the job can be claimed, provided they are not reimbursed by the employer.
- Telephone and Mobile Expenses: Employees can claim back a portion of the cost of using their personal phone for work-related calls, including both landline and mobile charges.
- Work-Related Mileage: Employees who use their personal vehicle for work-related travel can claim back a portion of the mileage expenses at the HMRC-approved rate. This includes trips between job sites or to meet clients.
- Home Office Equipment: Items like desks, chairs, and computers purchased for setting up a home office for work purposes are eligible for claims.
- Eye Tests and Prescription Glasses: If an employee is required to use a computer or VDU for their job, the cost of eye tests and prescription glasses specifically for this purpose can be claimed.
By understanding these categories, employees can ensure they claim back all eligible expenses and reduce their taxable income.
Detailed records and supporting documents, such as receipts and mileage logs, are critical for successful claims. This simple step can lead to significant savings on annual tax bills.
Can I Claim Back Tax for Working from Home?
Employees working from home may be entitled to claim tax relief on additional household expenses incurred due to their work.
This applies to both full-time remote workers and those working from home occasionally, provided the arrangement is a requirement of their role and not by personal choice.
Eligible Costs Include:
- Utility Bills: Additional heating, electricity, and water costs.
- Internet and Phone Expenses: A portion of broadband and phone bills directly used for work purposes.
- Office Supplies: Items such as paper, ink, or other materials needed to perform job tasks.
Flat Rate Option:
HMRC offers a flat-rate tax relief of £6 per week without requiring employees to provide evidence of costs. For higher amounts, detailed receipts and records are necessary.
Ineligible Costs:
- Expenses that would be incurred regardless of working from home, such as rent or mortgage payments.
- Equipment purchased for personal use or dual purposes, like furniture or general-use devices.
To claim this relief, employees can apply through the online HMRC portal or via Self Assessment tax returns. Keeping clear records of expenses ensures a smooth and accurate claim process.
What Tools and Equipment Are Claimable for Tax Purposes?
Employees who purchase tools or equipment necessary for their job may be eligible for tax relief on the associated costs. HMRC allows these claims as long as the items are required solely for work and are not reimbursed by the employer.
Eligible Items Include:
- Tools for Manual Labour: Hammers, drills, or other equipment specific to trades such as construction or plumbing.
- Technology: Laptops, printers, or other devices necessary for fulfilling job responsibilities (e.g., remote work).
- Specialized Equipment: Industry-specific items such as stethoscopes for healthcare workers or design tools for architects.
Flat Rate Allowance:
HMRC offers a flat-rate allowance for certain industries, such as mechanics or carpenters, who frequently incur costs for tools. This simplifies claims, as receipts are not required under the flat-rate system.
Non-Claimable Items:
- Equipment used for both personal and work purposes without clear separation.
- Items purchased voluntarily and not mandated by the employer.
Claims can be made via Self Assessment or Form P87, and employees should retain receipts and purchase records for high-value items to ensure compliance. This ensures employees don’t miss out on legitimate deductions for necessary tools and equipment.
Are Training and Education Costs Tax-Deductible for Employees?
Employees may claim tax relief on training and education costs, but only under specific conditions set by HMRC. The training must be directly related to the current job and necessary for improving the skills required to perform it.
Eligible Training Costs:
- Job-Specific Training: Courses that enhance existing skills for an employee’s current role. For example, a nurse attending an advanced clinical skills workshop.
- Mandatory Certifications: Training required by an employer or industry to maintain a role, such as health and safety courses.
- Learning Materials: Expenses for books, manuals, or online resources directly related to the training.
Non-Eligible Costs:
- Training for personal development or career changes, such as switching to a new profession.
- Courses unrelated to the employee’s current job, even if they are in the same industry.
To claim tax relief, employees must provide proof that the training was directly related to their current role.
Claims can be submitted via Self Assessment or through Form P87, depending on the type and value of expenses. Detailed receipts or course invoices may be required to substantiate the claim.
What Flat-Rate Expenses Can Employees Apply For?
Flat-rate expenses provide employees with a simplified way to claim tax relief without the need to keep detailed receipts for specific costs.
HMRC has pre-approved flat-rate allowances for certain occupations where employees typically incur regular work-related expenses. These allowances help streamline the process for claiming tax relief.
Who Qualifies for Flat-Rate Expenses?
Employees in roles that require:
- Uniforms or Protective Clothing: Nurses, mechanics, or construction workers who regularly incur expenses for cleaning or maintaining uniforms or safety gear.
- Industry-Specific Tools: Roles requiring the regular purchase or upkeep of tools, such as carpenters or electricians.
Examples of Flat-Rate Allowances:
- Healthcare workers: £125 per year.
- Mechanics: £120 per year.
- Construction workers: £120 per year.
Advantages of Flat-Rate Expenses:
- No need to provide receipts for claims within HMRC’s approved flat rates.
- Simplifies the tax relief process for commonly incurred expenses.
How to Claim Flat-Rate Expenses:
Employees can apply through Form P87 or include the claim in their Self Assessment tax return. If actual expenses exceed the flat-rate allowance, a more detailed claim with evidence can be submitted for the higher amount.
This option ensures that employees in qualifying roles do not miss out on tax relief, even if they lack detailed records of their expenses.
How Do I Claim Back Overpaid Tax from HMRC?
Employees may find that they have overpaid tax due to changes in their income, incorrect tax codes, or unclaimed allowances. Fortunately, HMRC provides straightforward processes for reclaiming any overpaid tax.
Common Reasons for Overpaid Tax:
- Incorrect Tax Code: An inaccurate code may result in higher tax deductions.
- Job Changes: Switching jobs mid-year without adjusting tax records can lead to overpayment.
- Unclaimed Tax Relief: Failing to claim eligible expenses, such as uniform maintenance or travel costs.
Steps to Claim a Refund
- Check Your Tax Code: Review your payslips or HMRC notifications to ensure the correct tax code is applied.
- Use HMRC’s Online Services: Log in to your Personal Tax Account on the HMRC website to check for overpayments and apply for a refund.
- Submit a P87 Form: For employment expenses not reimbursed by the employer, submit a P87 form to claim tax relief.
- Request a P800 Calculation: If HMRC identifies an overpayment, they will issue a P800 tax calculation, which outlines the refund amount.
What Are the Deadlines for Claiming Tax Relief in the UK?
Understanding the deadlines for claiming tax relief is essential to ensure employees do not miss the opportunity to reduce their tax burden. HMRC enforces a strict time frame for submitting claims related to work-related expenses and overpaid tax.
Key Deadlines:
- Work-Related Expense Claims: Employees have up to four years from the end of the tax year in which the expense was incurred to submit a claim. For example, for expenses incurred during the 2020/2021 tax year, the deadline would be 5 April 2025.
- Overpaid Tax Refunds: Similarly, claims for overpaid tax must be made within four years from the relevant tax year’s end.
- Self Assessment Deadlines: If claiming through Self Assessment, the online submission deadline is 31 January following the end of the tax year.
Tips to Meet Deadlines:
- Keep Records: Maintain receipts, mileage logs, and other supporting documents for at least four years.
- Set Reminders: Mark key dates on calendars or use HMRC’s digital tools for deadline alerts.
- File Early: Submitting claims well before the deadline ensures timely processing and avoids last-minute errors.
Employees should be vigilant about these time frames to ensure they can benefit from all eligible deductions and refunds. Missing a deadline could mean losing out on potential tax savings.
Conclusion
Claiming back tax as an employee doesn’t have to be complicated. By understanding which expenses qualify, keeping accurate records, and meeting HMRC’s deadlines, you can maximise your tax relief. From uniforms to travel costs, small claims can add up to significant savings.
Take the time to review your finances and apply for all eligible deductions. With the right approach, you can ensure you’re only paying the tax you owe—nothing more.
FAQs
Can employees claim tax relief for commuting?
No, commuting between home and the usual workplace is not eligible for tax relief. Only work-related travel is claimable.
How do I know if my tax code is correct?
You can check your tax code on your payslip or through your HMRC Personal Tax Account. Incorrect codes should be corrected immediately.
Can I claim tax relief for equipment I bought for work?
Yes, if the equipment is necessary for your job and was not reimbursed by your employer, you can claim tax relief.
Are flat-rate expenses available to all employees?
No, flat-rate expenses apply to specific roles, such as healthcare workers or mechanics, where job-related costs are common.
Do I need receipts to claim tax relief?
For claims exceeding HMRC’s flat rates, receipts are required. For smaller amounts, you may not need detailed evidence.
Can I claim back tax if I work from home occasionally?
Yes, if your employer requires you to work from home, you may claim relief on additional expenses like utilities.
How long does HMRC take to process tax relief claims?
Typically, HMRC processes claims within four to eight weeks, but delays can occur during peak times.
