HMRC has tightened up the process of claiming tax-deductible employment expenses following a series of high-profile scandals. Those claiming employee expenses must now provide evidence.
If you incur job-related expenses of up to £2,500, which your employer does not fully reimburse, you may be able to claim tax relief. For expenses to be eligible for relief, they must have been incurred wholly, exclusively, and necessarily in performing your employment duties.
What’s Changed?
Historically, the ‘pay now check later’ process meant that tax refunds were automatically paid out before HMRC reviewed the claim’s legitimacy. In response to a growing number of fraudulent claims, HMRC suspended the processing of some employment expense claims on the 10th of June 2024, while it considered the best way to proceed.
From the 14th of October 2024, taxpayers could no longer submit a PAYE employment expense claim digitally or over the phone. Instead, claims for employment expenses of up to £2,500 must be made using printed form P87 and accompanied by supporting evidence. This could be:
- receipts,
- a copy of your mileage log,
- or any other proof of the amount you have paid.
How Long Do I Have To Make A Claim?
You have four years from the end of the tax year to make a claim, so for the current tax year, HMRC must receive your claim by the 5th of April 2029. For claims relating to the 2020-21 tax year, claim forms and evidence must be posted in time to reach HMRC by the 5th of April 2025.
What About Claims Over £2,500?
It has been possible to make online claims for flat rate ‘uniform, work clothing, and tools’ expenses since the 31st of October 2024. For employment expenses over £2,500, you must submit a self-assessment tax return to claim the tax relief. Our team of expert accountants at Digital Tax Matters can help you with this process.
Submit Your Claims With Our Help
If you have incurred employment expenses that have not been fully reimbursed by your employer, we can help you gather sufficient evidence and submit a claim. Submit an enquiry detailing your circumstances using our contact form and a member of our team will be in touch with you shortly.