16 October 2023
Are you claiming tax relief for your job-related expenses? Maximise your savings!
At Morrissey Chartered Accountants, we understand the importance of optimising your tax planning strategies to maximise your savings. One effective way to achieve this is by claiming tax relief on eligible job-related expenses. In this article, we will guide you through the definition of tax-deductible expenses, how to claim them, and the benefits.
What are Job Related Tax-Deductible Expenses?
A tax-deductible expense refers to certain job-related expenses which you can claim tax relief for the amounts you paid out. This applies whether you have paid the expenses yourself without any reimbursement or if your employer reimbursed the expense, but you were taxed on the reimbursement.
It’s important to understand that claiming tax relief on these job-related expenses means that the tax you would usually be charged on an item is removed. However, it’s not equivalent to getting an item for free. For example, as a basic rate taxpayer, if you spend £100 on a work-related item, you can claim £20 relief (20% of the total paid)
Eligibility and Record Keeping
To qualify for tax relief, the expenses must be wholly and exclusively related to your job. You cannot claim relief on items for which your employer has provided alternatives, or your employer has already reimbursed your expenses.
It is important to keep accurate records for each expense, like receipts, and claim within four years of the end of the tax year, 5 April each year, during which you paid the expense.
Claiming Tax Relief through PAYE
If you pay tax through PAYE (Pay as You Earn), you may be eligible to have your tax code adjusted, resulting in reduced income tax. To qualify, you must not fill a self-assessment return and be owed less than £2,500. You can apply online through gov.uk or submit form P87 to claim relief through PAYE.
Claiming Tax Relief through Self-Assessment
For individuals who usually complete a self-assessment tax return, you must use this method to claim tax relief on expenses. Additionally, you must use a self-assessment tax return if you’re claiming for relief over £2,500.
Reimbursement for Business Travel
If you use your own car or a company car for work, you can claim tax relief on the mileage that hasn’t been reimbursed up to the HMRC-approved mileage allowance. You can’t claim relief on mileage used for commuting between your home and normal workplace, but you might be eligible for journeys to temporary workplaces.
Expenses on Business Trips
Reasonable expenses incurred during business trips, such as public transport costs, accommodation, food, and equipment, are eligible for tax relief. You can claim for these expenses if they haven’t been reimbursed by your employer.
Work Uniform Expenses
While you can’t claim for the initial cost of buying a uniform, the cleaning, repairing, or replacing of protective clothing and necessary work uniforms are eligible for tax relief. HMRC has agreed on a flat-rate allowance for certain occupations, and you can claim more than the flat-rate if you have spent more and retained receipts. Claim tax relief for your job expenses: Uniforms, work clothing and tools – GOV.UK (www.gov.uk)
Membership Fees Expenses
Membership fees and subscriptions to approved professional bodies are eligible for tax relief if they are necessary for your job. Lifetime membership subscriptions and fees paid by your employer are not eligible for relief.
Tax Relief if You Work from Home
If you work from home, you may be able to claim tax relief on certain expenses, such as heating, lighting, and telephone costs. You can claim a flat rate of £6 a week from April 2020 without providing evidence. For claims over £6 a week, you’ll need to show evidence of your extra costs. Claim tax relief for your job expenses: Working from home – GOV.UK (www.gov.uk)
We encourage you to take advantage of job-related tax-deductible expenses and maximise your tax savings. Our team at Morrissey Chartered Accountants are here to assist you in making the most of these opportunities. Contact us today for personalised advice and guidance.