What is Tax Relief?
In a nutshell, tax relief is an incentive or system that lets you pay less income tax. It is available to all UK tax payers, so more people like you keep more of your hard earned money – and we’re here to help you get it back.
There are lots of different types, and getting to know what tax relief you are eligible to claim can save you money now, and in the future.
Claiming tax relief means you can either:
- reclaim tax in the form of a tax rebate from past tax years.
- pay less tax in the future by claiming tax relief on things you pay for to do your job.
Tax relief for expenses of employment are important for every employed person paying tax under PAYE. If you pay for items that you need to buy for your job, it’s likely you will be able to claim tax back on the amount you’ve spent. A claim can be backdated for the last four tax years.
TIP: If you don’t make a tax relief claim you won’t get back what you are entitled to and could miss out on hundreds, sometimes thousands, of pounds.
What types of tax relief can I claim?
If you’re employed under PAYE some of the popular ways you can secure tax relief against your income tax are:
Mileage tax relief…
- Using your own car or van: claims can be made if you use your own car for work, but only if you go to temporary places of work.
- Company car: if you pay for your own fuel in a company car or van and are not reimbursed by your employer for business miles.
- Public transport: you can also claim for the cost of public transport if you use it to travel to temporary workplaces.
You can use our business mileage tax rebate guide to find out more about mileage claims and what it could be worth to you.
Professional fees tax relief
Tax can be claimed back on subscriptions or fees paid into some professional bodies and Trade Unions. Tax relief cannot be claimed on all professional bodies and Trade Unions, only the ones approved by the tax office. Even if the organisation you pay membership into is approved, you can only claim if you need the membership or it is helpful for your job. You can view the full list of allowable professional bodies in our professional fees directory.
Tools tax relief
Buying tools and equipment for your job allows for a claim to be made on the expenses you’ve incurred. There are normally two ways of claiming tax back for your tools:
- Tax code allowance. Many industries have agreed an allowance to be used in your tax code. This type of claim does not need receipts and the value of the allowance varies from industry to industry.
- Capital allowances. Allows for tax relief on the full cost of your tools, and you will need receipts or a statement showing proof of purchase. Usually you can claim a considerably higher tax rebate this way, in comparison to the agreed tax code allowances.
Uniform tax relief
If you wear a uniform or protective clothing for work you can claim uniform tax relief to cover the cost of washing and maintenance. The amount you can claim is currently £60 per tax year and is known as a flat rate expense.
Higher rate pension tax relief
Pension tax relief exists only for those who are higher rate tax payers, and contribute to a private pension scheme. It’s not normally due if you pay into an occupational or public service pension scheme.
Flat rate expenses tax relief
The tax office has agreed a tax code allowance, called a flat rate expense, for many different job titles and industries. It is usually given to cover the cost of uniform washing and, in some cases, purchasing tools.
The amount of flat rate expense that can be claimed varies depending on your job title. You can find out how much flat rate expenses tax relief you can claim for in our flat rate expenses guide.
Working from home tax relief
It’s possible to reclaim a tax rebate if you use your own home for work purposes. You can claim tax relief on the cost of household expenses like:
- Telephone calls
- Gas and electricity
You can’t claim for your mortgage or rent.
The tax office has agreed rates, meaning you don’t need to provide receipts. If you want to claim for more than the agreed rates, you’ll need to provide evidence.
Working at home agreed rates
- Up to the 5th April 2020 the agreed rate is £4 per week.
- After the 5th April 2020 the agreed rate is £6 per week.
How do I claim my tax relief back?
The method used to claim your tax relief back from HMRC depends on the type of tax relief you are reclaiming.
Tax relief claims for expenses due to your job you will need form P87 and or a self assessment tax return which can be both submitted online to HMRC.
You can use our income tax form guides to find out about other tax forms and how to use them to help you claim your tax relief.
Tax relief and your P800 tax calculation
When your tax relief claim has been processed HMRC will send you out a P800 tax calculation in the post to give you a breakdown of what you are owed back.
When you receive a P800 tax calculation you can claim back your tax rebate online via your personal tax account or by using the HMRC tax rebate app which let’s you request your rebate to be paid by bank transfer.
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