Claiming tax relief for employment expenses

In most cases, employees will be able to claim back any expenses that they incur in doing their job from their employer. However, where the employer will not reimburse the employee’s expenses, there may be tax relief to be had.

Qualifying expenses

Relief can only be claimed for qualifying expenses. These may be either qualifying travel expenses or expenses wholly, exclusively, and necessarily incurred in performing the duties of the employment. Any expense that meets this condition is eligible for relief, although those seeking to make a claim should be warned that this is a strict test.

Travel expenses

Employees may incur travel expenses as part of their job. While there is generally no deduction for the normal day to day costs of travelling between home and work (unless the employee is temporarily working at another location for less than two years), employees may be able to obtain tax relief for the cost of business journeys where this is not met by the employer. To qualify, the journey must be a business journey and not substantially the same as the normal home to work journey – for example, travelling to visit a supplier in another part of the country or attending a meeting during the day at a customer’s premises. A deduction may be claimed for the cost of public transport, parking, etc.

A deduction may also be claimed for associated expenses on food, drink, and overnight accommodation.

Business mileage

Where the employee uses his or her own car for business travel and the employer does not meet the cost, the employee can claim a deduction based on 45p per mile for the first 10,000 business miles in the tax year, and 25p per mile thereafter. If the employer does pay a mileage allowance, but it is less than this, the employee can claim relief for the shortfall.

Fees and subscriptions

If the employee pays a subscription to an approved professional body and the employer does not meet the cost, the employee is entitled to the tax relief as long as membership is necessary or helpful to his or her job.

Working at home

Where the employee works at home, they may be able to claim relief for the additional costs incurred as a result, such as additional electricity and gas used. A claim of £4 a week does not need to be substantiated.

Partial reimbursement

If the employer meets some but not all of the cost, the deduction claimed must be reduced by the amount reimbursed by the employer.

Making the claim

Tax relief for employment expenses can be claimed via the self-assessment return where the employee needs to complete one. If the employee does not need to complete a tax return and the claim is not more than £2,500, it can be made online or on form P87. Claims may also be made by phone in some circumstances.