Tax breaks for employees

.Over the past couple of years, you have no doubt seen companies advertising that they will reclaim tax for you if you had to pay for uniforms for work, or spent money travelling for work. There’s nothing wrong with what these companies are offering, however they do take a hefty enough chunk of any payment you are due back. For the most part, it’s simply a case of filling out a single form.

So what can you claim for and how do you go about it?

Uniforms/work clothes & tools

You are allowed to claim for the cost of cleaning, repairing or replacing uniforms or specialist work clothing or specialist tools you had to buy for your job. However, you are not able to claim for the initial cost.

You can either claim for the actual cost of these expenses or, HMRC has a table of flat rates for each occupation that you can use instead. You are fully entitled to claim the higher amount.

Mileage

Most people are aware that when you use your own car to travel for work purposes (not travelling to work from home, or vice-versa), your employer can pay you a mileage rate. This payment is tax free so long as it isn’t more than the approved HMRC rates (currently £0.45). But what if your boss pays you less than this rate (which he or she is perfectly entitled to do)?

Well, the HMRC rates are deemed to be the cost incurred per business mile – an average of total fuel costs, insurance, road tax, wear & tear, depreciation, tyres etc. So if you don’t get the full 45p per mile, in the taxman’s eyes you are out money. As such, you are allowed to claim tax relief on this difference.

If you do very few business miles, this isn’t going to be worth your while. However, as an example, if you do 5,000 miles a year at a mileage rate of 25p, you have incurred costs of 5,000 x 20p which is £1,000. For basic rate (20%) taxpayers, that equates to £200.

Professional Fees & Subscriptions

If you have to pay a subscriptions or membership fee to certain approved organisations either because it is a requirement of your job or is helpful in your job, you are entitled to claim tax relief on this. Your organisation must be on the list of approved professional bodies and you can’t claim any relief if your employer covered the cost.

How to claim

If the total of your expenses is less than £2,500 (and you don’t currently fill in a tax return) you need to submit form P87. If your claim is for more than this amount you must claim on your tax return, even if you don’t currently file one.

Now for the good news – you can go back up to four tax years to make a claim.

If you think you have incurred expenses for work and I haven’t mentioned it, have a look at the HMRC guidance on this. As a rule however you should be able to claim for any expenses which were incurred “wholly and exclusively” for work purposes.