Did You Know about These Tax Reliefs from Job Expenses?

Tax Reliefs from Job Expenses

As an employee, there must have been times where you’ve incurred expenses from your own pocket inorder to facilitate your company’s job. In return the company may or may not have appreciated your efforts, but today we will,by helping you get tax reliefs for such expenses.

1 Working from Home

Since covid pandemic hit worldwide, work from home has become the new normal for organizations. With employees working from their respective homes, their cost in terms of electricity consumption, gas, water, internet access and phone bills have shot up. Tax relief can be availed for all of these expenses, but partially. As per the latest notification, you can claim £6 per week (starting April 6, 2021). The relief will also depend on the rate of tax that you pay.

For instance, your tax bracket is 20% and youclaim£6 per week. So, in this case, your tax relief amount would be computed as 20% of £6 per week, coming to £1.20 per week.

Keeping evidences such as receipts and bills are necessary.

2 Uniforms and tools

Some people need to use uniforms or buy machines for executing their jobs, say work related to repairs. Under such circumstance, full amount of the initial cost is available as tax relief. This includes expenses incurred on:

  • Buying new equipment
  • Replacing small tools that is required for the job
  • Cleaning or replacing of any specialist clothing that is required to perform a job, like PPE kits

The claim can also be under “flat rate expense”

3 Use of Vehicles

Though travel may not a part of daily schedule during covid times, in case you need to go out with some official work, tax relief is available. The relief will depend on the status of the car –

  • Vehicle is owned by employee – Tax relief to be available for fuel, electricity, road tax, MOTs and repairs. However, all records such as bills, mileage record, etc., needs to be maintained by the employee.

The approved mileage rates are mentioned below:

Type of VehicleFirst 10,000 business miles per tax yearEach mile above 10,000 business miles per tax year
Four wheelers (car and vans)45p25p
Motorcycles (bike and scooter)24p24p
  • Vehicle is owned by the company – Tax relief to be available for fuel, electricity and repairs borne by the employee from his pocket.

Note: In case employer offers full reimbursement, no tax relief is available. Whereas partial reimbursement is offered, the difference amount can be claimed under tax relief.

  • Professional Fee & Subscription–If your job includes availing premium membership fee or subscription fee in order to perform your tasks, then any payment towards such subscription falls under tax relief. However, there are two conditions that HMRC will see:
    • The payment has been made by you
    • The payment has been made to entity that has been approved by HMRC

In case the employer has refunded the amount to you, then such tax benefit will not be available.

  • Travel & overnight expenses –Traveling may seem to be distant thing in the current scenario, however, if you have to travel for business purpose then costs such as public transport, parking fees, hotel accommodation, meal, printing charges and business phone calls is subject to tax relief. However, necessary evidence has to be present for the claim.

As an employee, there are numerous scopes that can help you reduce your tax liability. Right knowledge and guidance from an experienced accountant can help you plan your taxes better. For a comprehensive coverage from maintaining books of accounts to filing your tax returns, get in touch with us.