Guide to tax relief for work expenses in the UK
If you find yourself paying for job costs out of your own pocket, making the most of available tax reliefs is essential. In the UK, HM Revenue and Customs (HMRC) offers tax relief for certain job-related expenses that are not reimbursed by your employer.
In this blog post, we will provide a comprehensive overview of the tax relief options available to UK taxpayers, including working from home, uniforms and work clothing, personal protective equipment (PPE), vehicles used for work, travel and overnight expenses, and buying other equipment.
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Which work expenses qualify for tax relief?
To be eligible for tax relief, expenses must be required for your job, bought with your own money, and only used for work purposes. You cannot claim relief for expenses that are reimbursed by your employer or for which your employer gives you an alternative. For example, you cannot claim tax relief on the cost of buying a work phone when your employer offers to pay for one, but you would rather get a different model.
In the rest of this post we explore the different expenses that are eligible for tax relief, assuming that HMRC’s conditions outlined above are met.
Work from Home tax relief
With the rise of remote work, many individuals find themselves working from home either full-time or part-time. HMRC allows eligible individuals to claim tax relief for additional household costs incurred while working from home.
To be eligible, you must meet certain criteria, such as living far away from your office or your employer not having a physical office. You cannot claim tax relief if you choose to work from home or due to COVID-19.
Allowable expenses include business phone calls and a portion of your gas and electricity bills. You can either claim a flat rate expense of £6 a week (for previous tax years, it was £4 a week) or the exact amount of your extra costs. However, to claim your exact expenses you will have to provide HMRC will receipts.
Tax relief for Uniforms, Work Clothing, and Tools
If your job requires you to wear a uniform or specialised work clothing, you may be eligible for tax relief on the cost of repairing, replacing, or cleaning them. A uniform is a set of clothing that identifies you as having a certain occupation, such as a nurse or police officer. Even if the clothing does not identify your occupation but is necessary for your work, such as overalls or safety boots, you may still be able to claim tax relief. Small tools can also qualify for this relief, such as electric drills or cameras.
It is important to clarify that you can only claim relief on the costs of cleaning, repairing, or replacing your specialist clothing or tools. You cannot claim for the initial cost of purchasing these items.
Also important to point out is that you cannot claim tax relief for the cost of buying or cleaning everyday clothing used for work. Similarly, you cannot claim tax relief for personal protective equipment (PPE) as your employer should either provide it free of charge or reimburse you for the costs.
You have the option to claim either the exact amount, which must be backed up by receipts, or you can claim the ‘flat rate expense’ for your job. You can find the list of available flat rates on HMRC’s website.
tax relief on fuel and Vehicles Used for Work
If you use your own vehicle for work purposes, such as cars, vans, motorcycles, or bicycles, you may be eligible to claim tax relief. However, this does not include commuting to and from your regular workplace, unless it is a temporary place of work. The amount you can claim depends on whether you own or lease the vehicle yourself or if it is provided by your employer.
If you use your own vehicle, you can claim tax relief based on approved mileage rates, which cover the cost of owning and running the vehicle. For company cars used for business trips, you can claim tax relief on fuel and electricity expenses, provided you keep records to show the actual cost.
You can click here to read our full post on travel and mileage expense claims.
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Travel and Overnight Expenses
If your job requires you to travel for work purposes, you may be eligible to claim tax relief on certain expenses. This includes public transport costs, hotel accommodation for overnight stays, food and drink, congestion charges and tolls, parking fees, business phone calls, and printing costs.
However, it’s important to note that you generally cannot claim for regular commuting expenses unless you’re travelling to a temporary place of work. This means that you cannot claim mileage costs for your daily commute from home to work and vice versa. You can click here to read our full post on travel and mileage expense claims.
Buying Other Equipment
In most cases, you can claim tax relief on the full cost of substantial equipment, such as a computer, that is necessary for your work. This falls under the annual investment allowance (AIA), a type of capital allowance. You can currently claim for expenses up to £1 million under the AIA.
However, you cannot claim capital allowances for cars, motorcycles, or bicycles used for work. You will have to claim business mileage and fuel costs, as described above. For smaller items like uniforms and tools that have a shorter lifespan, you can claim tax relief in a different way.
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