PAYE Job Expenses
For many UK residents in PAYE employment, there will be some expenses incurred in their profession which may be required for the role. Usually, provided the expenses are incurred wholly for business purposes, the costs can be reclaimed to claim reliefs against income tax.
An employee can always apply for tax relief online with HMRC for up to 5 different jobs. If the employee expenses are less than £1,000 (Or £2,500 for subscriptions) then the employee can apply by the phone using HMRC’s income tax contact details. The relief can only be claimed for by post if an individual is completing the application on an employee’s behalf. In all cases, the applicant must ensure that all evidence supporting the expenses is available for review if HMRC request the documents.The costs of equipment which can be expected to provide use for business, such as the purchase of a computer or laptop, can be fully claimed for relief. Small tools that will last less than 2 years and clothing, such as uniform or specialised gear, only the cost of repairing, cleaning or replacing the items can be claimed rather than the initial purchase cost. These can be claimed at either the full cost of the receipt or using HMRC’s flat rate expenses.
Vehicles are treated differently so the full cost of these will not be claimable, but the taxpayer can claim for the travel for business trips or to a temporary place of work. If an employee buys or leases their own car they can claim 45p per mile up to 10,000 miles and then at 25p per mile thereafter, miles done on a motorcycle are claimed at 24p per mile, or bike will be able to claim 20p per mile. A record should be kept of the dates and miles travelled.
If the company owns the car, motorcycle or bike and are lending its use to the employee then only the costs to refuel the motor with fuel or electricity can be claimed and receipts must be kept safely.
If the employer includes an allowance for travel in the employee’s pay in any situation, this cost must be deducted from the calculated expenditure.
If an employee must travel and/or stay overnight somewhere for a business trip, the costs of this can be claimed. Costs for a business trip that can be claimed are:
• Travel on public transport, parking costs, congestion charges and tolls
• Hotel accommodation
• Food and drink during the trip
• Business phone calls that add additional charges to the phone bill
• Printing expenses for business documents
If the employer reimburses any of the costs, or includes an allowance for the trip, in the employee’s payslip, this must be deducted from the total costs incurred.If a job requires an employee to register for a professional subscription, the cost of this plus any fees can be claimed for tax relief if the employer does not reimburse the employee. The professional body must be approved by HMRC and appear on their listing in order to put through the expense.Tags:
Income tax relief, PAYE job expenses, PAYE