Tax Reliefs For Employees

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March 7th 2021
Tax Week 48
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Tax Reliefs For Employees

Read our overview of the types of expenses an employee can use to reduce their tax bill.

What can you claim?

HMRC are very stringent on what is allowed against your income as a work-related expense, but there are some basic guidelines available as to the types of expenses they will consider.

Consideration is made for anything you have to pay for yourself, which has not been refunded by your employer, and is required as part of completing tasks within your employment.

We will cover details regarding the expenses categories included within our expenses calculator

  • Business Mileage

    If you use your own vehicle for work and have to make journeys other than those to/from a permanent place of work and home, you can claim mileage costs based on a pence per mile allowance. The vehicle can be a car/van, motorbike or bicycle. If you carry colleagues you can get an additional allowance.

  • Company Car Fuel

    If you purchase fuel privately for a company car being used for business, and the amount has not been fully reimbursed by your employer, you can claim the difference as an expense.

  • Fees For Subscriptions To Approved Professional Organisations

    If you are required to sign up to/become a member of a professional organisation as part of work, you can claim any expenditure on fees or memberships to reduce the amount of tax you pay. This does not apply to lifetime membership subscriptions or if your employer makes the payments. HMRC provide a list of approved organisations here.

  • Tools or Equipment For Work

    For any small equipment or tools, something that has a low value after around two years, you can claim tax relief. As long as the item is a necessity for work and is not supplied by your employer, you can claim the full purchase price as an expense – you can also claim any cost of replacing and maintaining the item. If the item is of higher value, or depreciates over a term longer than two years you would have to claim it as a capital allowance.

  • Specialist Clothing or Uniforms

    If you wear a specialist piece of clothing in order to do your job, or if you are required to either provide or maintain your work uniform (possibly displaying logos or branded) you can claim the respective costs as expenses against your taxable income.

  • Costs of Working From Home

    If you work from home, any costs which are wholly and exclusively for work can be claimed as expenses against your taxable pay. You will not be able to claim costs for things you have shared usage unless there is an aspect which is identifiable - i.e business phone calls but not telephone line rental. However, the extra costs of heating and lighting can be claimed. At the moment any claims of up to £4 per week or £18 per month will not require proof.

    If you purchase additional furniture or equipment for work, and can provide proof, these can be claimed as either tools/equipment of under capital allowances.

  • Travel and Subsistence

    If you have to travel for work, some associated costs can be claimed against your taxable income.

    For example

    • Train, Bus, Taxi fares.
    • Hotel costs, including meals.
    • Toll and congestion charges.
    • Vehicle related fees (parking).
    • Communication costs (phone, fax, photocopying).

    Any business mileage incurred would go under the business mileage category.

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