Two very sensible questions there. Here is the answer to both.
Let’s see if you can save any money on your tax bill.
What’s a flat rate expense allowance?
Lots of taxpayers spend some of their own money on things that they need for work. As a way of acknowledging this, the government allows you to claim tax relief on a specified work expenses amount, through the flat rate expense allowances system. These rules are set and administered by HMRC. The flat rate expense allowances are organised by job type. Each one has its own flat rate expense allowance you can claim. You need to be paying income tax in the tax year you are claiming the flat rate expenses.
Common jobs that have unavoidable costs for an employee are included in HMRC’s ‘List of industries and Occupations’ table.
Flat rate work expenses amounts are not up for discussion. But you do not need to have any receipts or other paperwork as evidence for your claim.
You also don’t need to keep making the same claim every year. After your first claim, your flat rate allowances will be written in to your tax code. So they are automatically taken account of in your income tax calculation.
HMRC have worked out a figure that they feel employees in that industry sector probably spend on work expenses. This is your flat rate expense allowance amount. You can claim tax relief on that amount.
For example:
You are entitled to a flat rate allowance of £80 in your industry sector.
If you pay income tax at the basic rate of 20%, you can claim 20% of that as tax relief. In this example, 20% of £80 is £16.00 for that tax year.
If you’ve never claimed before and your circumstances make you eligible, you can make a backdated claim for the previous four tax years.
What work costs are included in the flat rate allowances?
You can claim tax relief on:
- Tools that you have to replace or repair
- Cleaning your work uniform. This must fit HMRC’s definition of ‘work uniform’.
- Replacing, repairing and cleaning specialist and safety clothing.
- Subscription fee for some professional organisations and Trade Unions.
Can I claim?
Here are the basic eligibility criteria for claiming flat rate expense allowances:
- You are employed
- You earn enough to pay income tax
- You spend money on tools, uniform, safety wear or subscription fees
- Your employer doesn’t compensate you for any outlay
- You don’t already have this included in your tax code
If you tick all these boxes, you are probably able to make a work expenses tax relief claim. Other things can be included in your claim, like mileage, you don’t have to make separate claims for each thing. Also, if you know you’ve spent way more than the allotted allowance amount, you might be able to claim tax relief on the actual cost using the Capital Allowances procedure. But that’s the answer to a whole other question. (And you’ll need all the receipts.)
For more information on how to make a tax rebate claim, have a look at our different guides and HMRC’s information on GOV.UK.
