HMRC have recently changed the way that employees are able to claim tax relief on their employment-related expenses along with the evidence that now needs to be supplied to support their claim. They have identified a potential tax risk arising from ineligible claims being made and believe this new process will minimise this risk.
Summary of changes
Previously claims for employment expenses under £2,500 could be claimed online via the P87 form, making an electronic application for tax relief. This service has now been stopped.
From 14th October claimants must use the paper P87 form to submit their expense claims to HMRC along with the supporting documentation for their claim.
Claims will need to be sent to the below HMRC correspondence address:
Pay As You Earn and Self-Assessment
HM Revenue and Customs
BX9 1AS
Expenses that can still be claimed digitally
As HMRC recognise that digital submissions are more convenient, you are still able to claim for uniform, work clothing and tool expenses via the online portal from 31st October and they aim to reinstate the digital claim route for all other expenses by April 2025.
Supporting Evidence
- Expenses must be broken down per employment and if any or part of the costs were reimbursed, this must be made clear.
- Copies of receipts, or other evidence, may be requested for the following types of expenses:
- Subscriptions to professional bodies
- Hotel and meal expenses (subsistence)
- Any other expenses
- Mileage logs will be required to show the reason for the journey along with the start and end postcodes of each trip, per employment.
- Working from home – Employment contacts stating that the employee must work from home may be required. If it is not stated in the employment contract other evidence will need to be provided to confirm that working from home is a requirement. If you are choosing to work from home, you will not be eligible for this allowance.
- Flat rate expenses (FREs) such as uniform, work clothing and tools will not require evidence but it is still up to the taxpayer to ensure they are eligible to claim FREs prior to submission.
You can make a claim if:
- your claim is within 4 years from the end of the tax year you are claiming for
- your total expenses claim for each tax year is £2,500 or less — if the amount is more than £2,500, you need to fill in a Self-Assessment tax return
- your claim is being made for the current tax year — this includes customers who are due to file a Self-Assessment tax return
- you have paid tax in any of the years you are claiming for
You cannot claim tax relief on job expenses if your employer or any other person paid back all of your work-related expenses.
Self-Assessment Tax Returns
HMRC are also conducting additional checks on Self-Assessment Tax Returns that contain employment expense claims and may be requesting additional information from the taxpayer to ensure the claims are eligible.
The process for claiming employment expenses via your tax return remains unchanged.
If you’d like to chat about any of the points made, please feel free to get in touch.
WhatsApp: 0777 49 39 111
Email: contact@whyfield.co.uk
Office Line: 01872 267 267
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