Person using a laptop and holding paper receipts
New digital service for employees to claim tax relief on job-related expenses

In October’s Employer Focus, we explained that HMRC require evidence to be submitted by employees wanting to claim tax relief for employment related expenses.

The move to a ‘check first, pay later’ approach was intended to combat fraudulent expense claims. However, the swift implementation of this requirement forced HMRC to resort to paper-based applications for tax relief whilst they developed the necessary online system.

A new digital service has now gone live, enabling employees to claim tax relief and submit evidence of expenses incurred as part of their employment online.

How should employees claim tax relief now?

Employees who are not in Self-Assessment but incur job-related expenses of up to £2,500 per tax year which are not fully reimbursed by their employer can access a new digital process for claiming tax relief on employment expenses. Claims can be submitted for multiple tax years, and for up to five employments.

The digital service begins with some simple questions to make sure it is the correct way to claim tax relief. For eligible claims, employees will then need to sign in to their Government Gateway account to continue the claim process.

As part of submitting their claim, employees will be asked to upload evidence of the expenses incurred, which should allow HMRC to process the claim without having to request further details.

What evidence is required?

The evidence requirements for the digital service are the same as the previous paper-based process, and will depend on the expenses being claimed. Some common examples include:

  • Business mileage – detailed mileage logs will need to be submitted, including the reason for each journey and the postcodes where it started and ended.
  • Travel and subsistence – copies of receipts and invoices, including the name of hotels/restaurants etc and the date incurred.
  • Working from home costs – evidence from an employment contract stating that the employee has to work from home will be needed, along with any calculations justifying the claim if it is based on actual costs rather than the default homeworking allowance of £26/month. No claims are possible where an employee chooses to work from home.

HMRC have published further examples of evidence required for different types of employment expenses.

Are there any other ways to claim?

Employees who prefer paper-based claims can still use the P87 ‘print & post’ service, as explained in our previous article.

Employees in Self-Assessment will need to continue claiming tax relief for employment expenses via their tax returns, and should retain adequate records of the expenses incurred, but will not need to provide any evidence when filing their return.

Flat Rate Expenses have their own digital claims service. These are fixed deductions available to employees in certain jobs for the costs incurred in replacing, cleaning or maintaining:

  • work uniforms (which identify a particular occupation),
  • specialist work clothing (eg overalls or protective boots), or
  • tools.

See our previous Employer Focus article for more information on Flat Rate Expenses.

 

This article reflects the position at the date of publication shown above. 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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