Tax rebate on expenses

Did you know you can get a tax rebate on expenses incurred for work for which you are not entirely reimbursed?

This can cover business mileage (not commuting), working at home, travel and overnight expenses, uniforms, subscriptions to trade union and professional bodies, protective clothing and tools.

You may be surprised at what you can claim against and how much you can get back!

Below we break out some of the information around this subject to give you an idea of what you can claim, but it can be quite confusing. Please contact us at any time for help with claiming a tax rebate on your work expenses, not just for this tax year but going back up to four years. Yes, four years!

[efaccordion id=”02″] [efitems title=”How to Claim” text=”The way you claim tax relief on expenses depends on the amount you’re claiming for.

Claims up to £2,500

You should make your claim:

Claims over £2,500

If your claim is over £2,500 for the tax year, HMRC will give you relief through your tax code for the current and next tax years, and will send you a tax return to fill in.

They will also check your tax calculation for the previous year.”] [efitems title=”How you get the tax relief” text=”The way you get tax relief depends on the amount you claim.

Claims up to £2,500

If your claim is £2,500 or less for the tax year, HM Revenue and Customs (HMRC) will usually make any adjustments needed through your tax code for the current tax year.

If you claim an estimated amount, HMRC will review it at the end of the tax year and make any adjustments needed through your tax code for the following year.

Claims over £2,500

You can only claim using a Self Assessment tax return. You need to register if you don’t already fill one in.

You’ll get a letter telling you what to do next after you’ve registered.”] [efitems title=”Uniforms, clothing and tools” text=”You may be able to claim tax relief on the cost of:

  • repairing or replacing small tools you need to do your job (for example, scissors or an electric drill)
  • cleaning, repairing or replacing specialist clothing (for example, a uniform or safety boots)
  • You can’t claim relief on the initial cost of buying small tools or clothing for work.

If you need to buy other equipment to use in your job, you can claim capital allowances instead.

What you can claim

You can either claim:

  • for what you’ve spent – you’ll need to keep receipts
  • a ‘flat rate deduction’

Flat rate deductions are set amounts that HM Revenue and Customs (HMRC) has agreed and are typically spent each year by employees in different occupations.

If your occupation isn’t listed, you may still be able to claim a standard annual amount of £60 in tax relief.

You don’t need to keep records of what you’ve paid for if you claim a flat rate deduction.”] [efitems title=”Business mileage, fuel and electricity costs” text=”You may be able to claim tax relief on fuel or electricity you use on business.

What you can claim depends on whether you’re using your own or a company vehicle.

You can’t claim for travelling to where you work, unless it’s a temporary place of work.

Using your own vehicle

If you use your own vehicle for business, you may be able to claim ‘Mileage Allowance Relief’.

To work out how much tax relief you can claim, add up your business mileage for the tax year and multiply it by the approved mileage rates.

If your employer doesn’t pay you a mileage allowance you can claim the full approved amount of Mileage Allowance Relief.

If your employer pays you a mileage allowance but it is less than the approved amount, you can claim Mileage Allowance Relief on the difference.

If your employer pays you more than the approved amount you’ll have to pay tax on the difference.

You must keep records of the dates and mileage of your work journeys.

Click here to download a simple printable mileage sheet for your record keeping.

Using multiple vehicles

Combine your business miles if you use more than one vehicle of the same type.

Calculate them separately if you use different types of vehicles.

Using a company car for business

You can claim tax relief on the money you’ve spent on fuel or electricity for business trips in your company car. Keep records to show the actual cost of the fuel or electricity you’ve bought or used.

If your employer reimburses only some of the money, you can claim relief on the difference.”] [efitems title=”Travel and overnight expenses” text=”If you have to travel for your work you may be able to claim tax relief on the cost or money you’ve spent on food or overnight expenses, called ‘subsistence’.

You can’t claim for travelling to where you work, unless it’s a temporary place of work.

Expenses you can claim tax relief on from your business journey include:

  • public transport costs
  • hotel accommodation if you have to stay overnight
  • food and drink
  • congestion charges and tolls
  • parking fees
  • business phone calls, fax and photocopying costs

You may also be able to claim tax relief on business mileage.”] [efitems title=”Professional fees and subscriptions” text=”You can reclaim tax on fees or subscriptions you pay to some approved professional organisations – but only if you must have membership to do your job or it’s helpful for your work.

You can’t claim tax back on fees or subscriptions you’ve paid to professional organisations not approved by HM Revenue and Customs (HMRC), or for:

  • life membership subscriptions
  • fees or subscriptions you haven’t paid for yourself (for example, if your employer has paid for them)

Your organisation can tell you how much tax you’re allowed to claim back.”] [efitems title=”Working at home” text=”You may be able to get tax back for some of the bills you have to pay because you have to work at home on a regular basis.

You can only claim for things to do with your work (for example, business telephone calls or the extra cost of gas and electricity for your work area).

You can’t claim for things that you use for both private and business use (for example, rent or broadband access).

You don’t need to provide records for claims of up to £4 per week (£18 per month). For claims over £4 per week you’ll need to provide evidence of what you’ve spent.

If you work at home voluntarily

If you’ve agreed with your employer to work at home voluntarily – under a ‘homeworking arrangement’ – they may still contribute towards your expenses but don’t have to.

If your employer contributes up to £4 per week (£18 per month) towards your expenses, you won’t need to provide receipts.

If your employer contributes more than £4 per week you will need to be able to show what you’ve spent to get tax relief.

You won’t have to pay tax or National Insurance contributions on the amount you get from your employer.

If you work at home voluntarily and your employer doesn’t contribute to your expenses, you can’t claim tax relief for what you’ve spent.“] [efitems title=”Buying other equipment” text=”In most cases you can claim tax relief on the full cost of substantial equipment you have to buy to do your work. This is because it qualifies for a type of capital allowance called annual investment allowance.

Claim in a different way for small items that will last less than 2 years, such as uniforms and tools.

You can’t claim capital allowances for cars, motorbikes or bicycles you use for work, but you may be able to claim for business mileage and fuel costs.

If your employer gives you money for the item

You should reduce the amount you claim tax relief on by the amount of money your employer gives you.”] [/efaccordion]

To stay up to date on the latest news relating to business and personal tax as well as lots of useful information to help you run your business, why not sign up to our monthly newsletter?

Making your tax less taxing!

Holiday – last minute changes to plans

An employee has booked annual leave that they’re due to take next week. For whatever reason their plans have changed and they want to cancel this time off at the last minute. Must you agree? Holiday rules The law states that where an employee wishes to take annual...

read more

HMRC’s deal with online trading sites

In a move aimed at creating more checks on businesses which trade online, HMRC is in the final stage of a deal with companies like Amazon and eBay. How might this affect your business? Online targets Businesses which trade online are increasingly in HMRC’s firing line...

read more

Directors – does it always pay to take a salary?

You’ve read that for maximum tax efficiency director shareholders should take a salary of £8,424 for 2018/19. But you have more than one business, plus other income. Should you take a salary from each and if so how much? The bigger picture There’s a surfeit of advice...

read more