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Back to basics: Job expenses
Expenses incurred by employees are generally the responsibility of the employer.
Quite often, however, employees have to bear the cost themselves when travelling for work, having meals and even providing clothes, which in most cases are not tax deductible.
What employment expenses qualify for tax relief in the UK?
Work-related travel
Having to travel to a different location from the workplace is an essential travel expense. The commute to and from the location will be tax-deductible.
Clothing
This could be for any ‘specialist’ or protective work clothes which are not paid for by the employer – these are known as flat rate expenses.
You cannot usually claim for buying tools and specialist clothing, but you can claim for their upkeep, for example, repairing, cleaning or replacing them.
Subsistence costs
Accommodation and upkeep are tax-deductible when an employee is away from home on work trips.
Professional subscriptions
Professional organizations’ subscriptions may also qualify for tax relief. However, the subscription should be related to your job and be made to a professional association authorized by HMRC.
The tax relief works by taking off the amount from your employment income, reducing the taxable income and the tax you have to pay.
This has led to coining the phrase ‘tax deductible’ or ‘allowable’ expenses. You may have to claim to obtain this tax relief.
You may be able to claim a standard £60 allowance per year for the cost of upkeep and replacement of specialist or protective clothing. The tax reduction you get is usually 20 per cent of the allowance.
Working from home
Working from home became commonplace during the pandemic.
Employers can make tax and NIC-free payments to an employee in respect of reasonable additional costs incurred for working at home, for example, gas, electricity, telephone and internet.
However, HMRC allows a tax and NIC-free flat rate reimbursement of up to £6 a week without providing evidence of extra costs. Anything above that will require receipts or bills as evidence.