HMRC is urging employees that they can claim for employment-related expenses directly from the Gov.uk website each year. Currently 70% of claimants are using repayment agents, who often take a hefty cut of any tax refund due.
- Employees are able to claim a tax refund for certain work-related expenses that they have incurred personally and these have not been refunded by their employer.
- Expenses must have been incurred 'wholly, exclusively and necessarily' for the performance of the employment duties. There can be no duality of purpose.
- Examples of the types of expenses that can be claimed include:
A direct claim for expense to be set against your employment income will in many cases result in a refund of tax paid for the year and can be made through HMRC's online portal.
To claim, you need to create a Government Gateway account to access the service. Once registered, there are step-by-step instructions and the whole process should take about 15 minutes.
The trickiest part of the sign up is often uploading information for the system to verify your ID. This may well take a few attempts.
HMRC point out that for those who think it may be easier to use an agent, that the taxpayer would have to provide the agent with the same information that the online claim requires. Additionally, these agents can charge up to 50% of the value of the claim in return for their services.
Useful guides on this topic
Employee expenses
A series of guides that look at the rules covering employee expenses
Annual expenses for employees: How to claim
The ways in which employees can claim tax relief for expenses changed on 7 May 2022. This guide explains how employees can claim tax relief for the employment expenses they incur.
Wholly and exclusively...toolkit
When is an expense allowed for tax purposes? What does 'wholly and exclusively' mean? How do you determine if a cost is wholly and exclusively incurred for the purpose of a trade? What cases are there?
External link
Don’t miss out on a tax refund for work expenses, HMRC urges
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