How to Claim Tax Relief on Job Expenses Using Form P87

Employees who are required to work from home and want to understand what tax relief they can legitimately claim. Many employees either underclaim legitimate relief or claim incorrectly due to misunderstandings around eligibility, commuting rules, and evidence requirements. HMRC applies strict conditions to employee expense claims. Claims made where home working is voluntary, where private use exists, or where ordinary commuting is involved may be refused. Incorrect claims can trigger enquiry. Claims are also limited to a 4-year backdating window, so delay can result in lost relief. If you are an employee and you incur expenses as part of your job, you may be entitled to claim tax relief on certain costs that your employer does not reimburse. Tax relief is not a refund of the full expense. Instead, you receive relief at your marginal tax rate. For example:

• A basic rate taxpayer (20%) claiming £100 of allowable expenses would receive £20 in tax relief.
• A higher rate taxpayer (40%) claiming £100 of allowable expenses would receive £40 in tax relief.

Working from Home Tax Relief

If your employer requires you to work from home, you may be entitled to claim tax relief for additional household costs.

Flat Rate Allowance

• You can claim a flat rate of £6 per week without needing to provide evidence of actual costs.
• If your employer pays you up to £6 per week, this is not taxable.
• If your employer does not reimburse you, you can claim relief directly from HMRC.

Claiming More Than £6 Per Week

You may claim more than £6 per week if you can demonstrate that your additional household costs are higher. However, you must retain evidence of the additional costs incurred. Costs must be wholly, exclusively and necessarily incurred in performing your duties. Relief is not available where working from home is voluntary.

Equipment Purchased for Work

You may be able to claim tax relief if you purchase equipment that you are required to use for your job, such as:

• Laptops
• Office chairs
• Mobile phones

The equipment must be necessary for your role and not for significant private use.

Business Mileage

If you use your own vehicle for business journeys, you may claim tax relief if your employer does not reimburse you in full.

• Relief applies to business travel only.
• Ordinary commuting between your home and permanent workplace does not qualify.

If your employer pays less than HMRC’s approved mileage rates, you can claim tax relief on the shortfall.

Backdating Claims

You can backdate claims for up to 4 previous tax years. Claims must be made within the relevant time limits. Missing the deadline may result in lost relief.

Common Mistakes and Risk Areas

• Claiming where home working is voluntary rather than required.
• Claiming broadband or household costs that would have been incurred anyway.
• Claiming for ordinary commuting.
• Failing to retain evidence when claiming above the £6 per week flat rate.
• Assuming COVID-era temporary easements still apply.

HMRC may request evidence to support claims. Incorrect claims can be amended or refused.

Real-World Application

Example 1: An employee required by their employer to work from home three days per week claims the £6 per week flat rate. No receipts are required. Example 2: An employee purchases an office chair required for their role. The employer does not reimburse the cost. Tax relief is claimed at the employee’s marginal tax rate. Example 3: An employee drives to temporary client sites and receives mileage below HMRC’s approved rate. Relief is claimed on the difference.