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How to claim tax relief for job related expenses

OCTOBER 2024 UPDATE: HMRC HAVE CHANGED THE PROCESS OF CLAIMING EMPLOYMENT EXPENSES. THE ARTICLE BELOW DOES NOT REFLECT CURRENT PRACTICE - PLEASE SEE OUR UPDATED ARTICLE TO UNDERSTAND THE NEW CLAIMS PROCESS. 

 

Employees can claim tax relief for expenses which they incur “wholly, exclusively and necessarily” in carrying out their employment duties. That means eligible expenses have to be related solely to their employment, and the employee has no choice but to pay the expense in order to do their job properly. The final requirement for tax relief to be available to the employee is that the expenses have not been reimbursed to them by their employer.

Common allowable employment-related expenses include travel costs (excluding ordinary commuting), approved professional subscriptions, and the cost of uniforms or work clothing. This can be a tricky area, so the ATT has made a video covering some common employee expenses, and there’s further guidance on what employees can claim for on GOV.UK.

Tax relief can be claimed for the current tax year but also for the previous four years, meaning keeping a record of job related expenses can really pay off for employees.

Once an employee has identified the expenses they’re entitled to tax relief for, there are a number of ways to claim that relief. If the employee is in Self-Assessment, they should include their allowable expenses when completing the employment section of their tax return.

For employees not in Self-Assessment, there are three methods of claiming tax relief on their job related expenses. Different conditions and restrictions apply to each, so it’s important that employees use the appropriate method. GOV.UK has a handy tool to help them choose the appropriate way to claim tax relief.

Claim online

Employment expenses can be claimed online:

  • by the employee only,
  • for up to five jobs, and
  • for expenses totalling up to £2,500 per tax year.

The employee will need a Government Gateway account to use the online service. If their employment expenses are more than £2,500 for any year, the employee can only claim expenses for that year by filing a Self-Assessment tax return.

Postal claims

HMRC also offer a postal claim form. This is available for anyone who prefers to make their claim on paper, but has to be used:

  • if employment expenses cover more than five jobs, or
  • for claims submitted by someone other than the employee (eg an agent).

Postal claims will only be accepted where they are made using the official form. HMRC will reject employment expense claims submitted by letter or in any other format.

Claim by phone

Employees can phone HMRC to tax claim relief for job related expenses (other than those relating to working from home) as long as:

  • they have claimed the same type of expense in a previous year, and
  • the total expenses are less than £1,000 for the tax year (or less than £2,500 in the case of professional subscriptions).

While phoning may seem like the simplest approach for repeat expense claims, HMRC phone lines are often very busy, and employees may be waiting on hold for some time before they can speak to an adviser. For this reason, the online or postal options are likely to be preferable.

 

This article reflects the position at the date of publication (19 December 2023). If you are reading this at a later date you are advised to check that that position has not changed in the time since.   

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