People very often believe that you can only claim allowances and tax relief if you are self-employed, but if you are in employment and incur an expense during the course of your business, you may be able to make a claim to HM Revenue and Customs (HMRC). Directors of companies can also claim for tax allowances and reliefs, although there are strict criteria for all claims.
What counts as a tax relief or allowance?
If you incur an expense that is solely related to your employment, you may be able to claim tax relief. There are many types of relief that can be claimed, but some are more common than others.
Travel expenses are often claimed for, which involves either the cost of fuel when using a company car or the mileage rates when you use your own vehicle. The mileage you can claim for is limited to travel you undertake during the course of your work. Travelling to and from your place of work is not an allowable expense and you must pay your own commuting costs.
You may be given payments for travel expenses by your employer, but if these fall below the amount approved by HMRC, you can claim Mileage Allowance Relief for the difference between the amounts. To make a claim for tax relief on travelling expenses, complete a form P87.
If you are claiming £2,500 or less, you may be able to have the relief included in your tax code. If the amount you are claiming is higher than this, you will have to complete a self-assessment tax return each year to claim.
Special clothing and tools
You may be able to claim tax relief for any specialist clothing that you have to wear for work, although this has to be special protective wear or a recognised uniform.
Generally, if you can wear the garments outside of your place of employment, such as plain black trousers and a white shirt, you won’t be able to claim. You also cannot claim for the initial cost of the clothing, but the tax relief is intended to help towards the cost of laundering, repairing and replacing uniforms. Any tools that you have to purchase especially for work may also come under the criteria for tax relief.
Claims for tax relief and allowances that are below £2,500 can generally be claimed for using a form P87. For any reliefs above that amount, you must claim by filling out a self-assessment tax return.
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