It’s not just employers who can claim tax relief for expenditure. As an employee you too might be able to claim tax relief if you use your own money for things you use as part of your employment. Nicola Roby, at CHW Small Business Bolton Accountants looks at whether you could save money.
You may be able to claim tax relief if you use your own money for things that you must buy for your job and you only use these things for your work.
However, you are not eligible to claim tax relief if your employer either gives you all the money back or provides an alternative. An example of this would be where your employer provides you with a laptop but you want a different type or model.
In order to claim tax relief, you must have actually paid tax in the year and you will get tax relief based on what you’ve spent and the rate at which you pay. For example, if you have spent £100 and you pay tax at a rate of 20%, the relief you can claim is £20.
You may be able to claim tax relief on the cost of repairing or replacing small tools you need to do your job or for the cost of cleaning, repairing or replacing specialist clothing such as a uniform or safety boots.
You may be able to claim tax relief if you use cars, vans, motorcycles or bicycles for work. This doesn’t include travelling to and from your work, unless it’s a temporary place of work.
How much you can claim depends on whether you’re using a vehicle that you’ve bought or leased with your own money or a vehicle owned or leased by your employer (a company vehicle).
If you are using your own vehicle for work you may be able to claim tax relief at the approved mileage rates which differ depending on the type of vehicle and the number of business miles you do.
This rate covers the cost of owning and running your vehicle, therefore, you can’t claim additionally for things such as fuel, road tax and MOTs.
If you are using a company car for business you can claim tax relief on the money you’ve spent on fuel for business trips in your company car. You should keep records to show the actual cost of the fuel.
If your employer reimburses some of the money, you can claim relief on the difference.
If you have to travel for your work you may be able to claim tax relief on the money you’ve spent on food or overnight expenses.
You can also claim tax relief for money you’ve spent on things like public transport costs, hotel accommodation if you have to stay overnight, food and drink and parking charges as examples.
Professional fees and subscriptions:
You can claim tax relief on fees or subscriptions you pay to approved professional organisations – but only if you must have membership or it relates to your job.
You cannot claim tax back on fees or subscriptions for life membership or subscriptions or fees which you have not paid for yourself (for example, if your employer has paid for them)
Tax relief can’t be claimed if you choose to work from home. If you are required to work at home by your employer then tax relief may be claimed on the extra gas and electricity you may use and the cost of business calls and broadband for example.
For some claims, you must keep records of what you’ve spent and you must claim within 4 years of the end of the tax year in which you spent the money.
If your claim is for the current tax year, HMRC will usually make any adjustments needed through your tax code.
If your claim is for previous tax years, HMRC will either make any adjustment in your tax code or send you a tax return to complete.
For advice on this or any other financial matter please contact our team at CHW Small Business Bolton Accountants on 01204 534031 or via our contact us page.
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