Employees who incur expenses in undertaking their job may be able to claim tax relief for those expenses where they are not reimbursed by their employer. The expenses will qualify for relief if they are incurred wholly, exclusively and necessarily in the performance of the duties of their employment or meet the deductibility conditions for particular types of expenses, such as travel expenses or professional fees and subscriptions.
Last year, HMRC introduced new evidence requirements for claims for employment expenses. While the new rules were being implemented, they also closed their online expenses claim service for a limited period. During this time, employees who wished to submit a claim for relief for employment expenses had to do so by post on form P87.
A new iForm went live in December, meaning employees can once again claim relief for employment expenses online.
Making an online claim
A claim can be made online using the new iForm by visiting the Gov.uk website at www.gov.uk/tax-relief-for-employees/travel-and-overnight-expenses, but only if the claim amounts to £2,500 or less in a single tax year.
Where the amount claimed is more than £2,500, it must be made in the tax return. Employees who are required to submit a self-assessment tax return should make the claim in their return, even if it is for £2,500 or less.
Evidence required
Claims for tax relief for employment expenses must now be accompanied by evidence in support of the claim. The evidence that is required will depend on the nature of the claim.
For example, where the claim is for a subscription to a professional body, a receipt or other evidence of the amount paid to that body should be supplied. For mileage allowance claims, a mileage log should be maintained which shows each journey, the postcode for the start and end of the journey, and the reason for the journey. The mileage log should be supplied with claims for mileage allowance relief.
Where an employee is required to work from home some or all of the time, a claim can be made for the additional household costs incurred as a result. Where such a claim is made, the claimant will need to submit a copy of their employment contract or such other document as makes it clear that the employee is required to work from home rather than working from home through personal choice.
For other expenses, a receipt or other evidence, such as a bank or credit card statement, must be provided which shows both the item in respect of which relief is claimed and also that the claimant paid for that item.
Evidence is not required for flat rate expense claims made for uniforms, work clothing, and tools.
If you have any questions regarding your specific circumstances, please feel free to get in touch with the team at Accountwise, your local Wokingham Accountants, on 0118 9623702 or email AccountWise.
