How to Claim Employee Expenses: Your Guide to Tax Relief

Tax relief could be yours if you pay for work-related expenses from your own pocket and they qualify as a deductible expense.

Many employees under PAYE miss out on tax relief because they don’t realise what they can claim.

To be eligible employee expenses must be recognised by HMRC and claimed back within strict tax deadlines.

HMRC won’t return the full amount you spent – you receive tax relief based on your personal PAYE tax rate.

A basic-rate taxpayer (20%) claiming the standard £60 uniform maintenance allowance receives £12 back. Higher rate taxpayers (40%) get £40 back on every £100 claimed.

Claims can be submitted with supporting evidence online through HMRC’s iForm system or by a P87 by postal application.

You have four years from each tax year’s end to file your claim, which provides ample time to collect proper documentation.

This guide explains which expenses HMRC allows, who qualifies to claim, and the exact steps to secure your tax relief.

Who can claim tax relief for expenses of employment?

Understanding eligibility requirements prevents wasted effort and ensures your claim succeeds. Not every employee qualifies for tax relief on work expenses.

You qualify when you spend your own money on items required for your job.

These expenses must meet HMRC’s “wholly, exclusively and necessarily” test:

• The expense was essential to perform your job duties.
• You had no alternative but to pay for it yourself.
• Your employer hasn’t provided full reimbursement.
• The item serves no personal benefit outside work.

HMRC rejects claims for ordinary items with dual personal use. For example regular clothing fails this test, but specialist uniform cleaning qualifies.

When employer reimbursement disqualifies you

Full reimbursement from your employer eliminates your eligibility to claim. You cannot request tax relief when you’ve already been compensated for the expense.

Partial reimbursement creates a different situation. You can claim relief only on the amount you personally paid.

A £100 professional membership where your employer contributes £60 leaves £40 eligible for your claim.

How much tax relief will I receive on my expenses?

Employees must pay income tax to benefit from tax relief on expenses. Your earnings need to exceed the personal allowance threshold in the tax year(s) of your claim.

Tax relief reduces taxable income, so people earning below this threshold see no benefit.

The amount of tax relief you receive depends on the highest rate at which you pay income tax.

Basic rate taxpayers (20%) will get 20% of the expense back, higher rate taxpayers (40%) will receive 40% and additional rate taxpayers (45%) get 45%.

Scottish PAYE tax rates are usually different for taxpayers in Scotland.

What expenses are tax deductible?

Understanding eligibility rules helps you identify which specific expenses qualify for tax relief.

HMRC recognises several categories of employment expenses that warrant claims.

Many taxpayers can use agreed flat rate expenses.They cover expenditure on work-related clothing and tools necessary for your occupation.

For example Joiners can claim £140 and Nurses £125 per tax year.

Also known as a flat rate deduction they enable you to receive tax relief for a set annual amount without the need to provide receipts.

HMRC provides a complete list of jobs, industries and their flat rate expense value.

Taxpayers can also claim for the actual cost of tax deductible expenses but will need to provide (or have if asked) evidence to HMRC.

Uniforms and specialist clothing

Tax relief applies to cleaning, repairing or replacing specialist work clothing such as uniforms or safety boots.

Initial purchase costs don’t qualify, but maintenance expenses do.

The most common uniform allowance is a standard £60 annual flat rate expense.

Certain professions qualify for higher allowances. For example healthcare workers, agricultural workers and public transport employees can claim specific amounts negotiated with their trade unions.

Tools

Numerous sectors have established specific tool allowance rates through negotiations with HMRC.

Claiming the FRE for tools is ideal if you don’t have receipts for the actual cost of what you have bought.

If you have spent more on tools than the flat rate expense is worth (and you have receipts) a capital allowance claim is possible to reclaim tax relief for the actual cost instead.

Mileage and travel costs

Business travel expenses qualify for relief, excluding regular commuting.

Personal vehicle business journeys allow these rates:

• Cars/vans | 45p per mile (first 10,000 miles), then 25p.
• Motorcycles | 24p per mile.
• Bicycles | 20p per mile.

Detailed mileage logs showing journey purposes and postcodes support your claims.

Professional fees and subscriptions

Approved professional body membership fees qualify when required for your role.

Annual subscriptions to recognised organisations including health professional bodies, legal associations, and teaching unions are eligible.

One example is tax relief on NASUWT subscriptions for teachers.

HMRC maintains an approved list of qualifying organisations which is worth checking if you need some clarification before claiming.

Working from home expenses

Required home working (not personal choice) allows claims of either £6 weekly without receipts or exact amounts with supporting evidence.

This covers additional costs such as electricity and heating for your designated work area only – broadband or rent don’t qualify.

Hotel and meal costs

Working away from your regular workplace creates eligibility for subsistence costs including accommodation, meals, parking fees, and business calls.

All claims require receipts showing dates and establishment names.

Other allowable expenses for employees HMRC recognises

Business phone calls, printing costs, and congestion charges related to business travel qualify for relief.

How to claim tax relief for your job expenses

After confirming your eligibility and identifying claimable expenses, you can start the actual claiming process.

HMRC provides online and offline methods to claim tax relief on employee expenses, each suited to different situations.

Using HMRC’s online iForm

The new online iForm system launched on 23 December 2024, making expense claims more efficient.

This digital platform lets you submit claims and supporting evidence electronically, removing postal delays and paperwork complications.

Steps for the online service:

• Log in with your government gateway ID and password.
• Complete eligibility questions to access the form.
• Upload expense evidence directly to the system.
• Get a reference number for tracking your claim.

Filling out and posting form P87

Form P87 remains HMRC’s standard method for postal claims. Complete this form carefully:

• Download from GOV.UK and fill it digitally or print and complete by hand.
• Provide all required information, including your employer’s PAYE reference.
• Include supporting evidence like receipts and logs.
• Sign and date the completed form – HMRC rejects unsigned submissions.
• Post your completed form with evidence to: Pay As You Earn and Self Assessment, HM Revenue and Customs, BX9 1AS.

When to use self assessment instead

Claims over £2,500 in any single tax year require self assessment rather than form P87.

Self Assessment process:

• Enter claims under the “Employment income” section.
• Keep records for potential HMRC requests, though evidence isn’t required when filing.

Claiming for multiple years or jobs

Both online and postal methods accept multiple claims:

• Submit claims for up to four previous tax years.
• Include details for up to five different employers on one form.
• Separate expense totals by employment for multiple jobs in the same tax year.

All claims must reach HMRC within four years of the relevant tax year’s end.

What you need to support your claim

HMRC has clear evidence requirements for employee expense claims. Proper documentation determines whether your claim succeeds or fails.

Good record-keeping from day one saves time later. Keep receipts, maintain mileage logs, and verify whether your employer has reimbursed any portion of your expenses.

These habits ensure smooth claims when you’re ready to submit.

Receipts, logs, and proof of payment

Most expenses need concrete evidence that you personally paid the costs. This includes:

• Receipts showing item names and amounts paid.
• Evidence of any partial employer reimbursement.
• Proof the expense was necessary for your job.

Evidence for working from home or mileage

Working from home claims need your employment contract stating you must work from home.

Mileage claims require detailed logs showing:

• Reason for each journey.
• Postcodes for starting and ending points.
• Total miles claimed.

PAYE reference and employer details

All P87 forms require your employer’s PAYE reference number. This unique identifier has two parts (e.g., 123/AA6543) and appears on:

• Your P60 or P45 forms.
• Your personal tax account under “PAYE Income Tax history”.
• Some payslips (though not legally required).

Flat rate vs actual cost claims

You can’t claim a flat rate expense and the actual cost for the same expense.

Flat rate expenses (such as the £60 annual uniform allowance) need no receipts, but you must still qualify for the claim.

Actual cost claims always require supporting evidence and receipts. If you can provide HMRC with the necessary paperwork claiming for the actual cost should be considered.

If your actual costs are more than the flat rate expense (and you have the records to back them up) you should get a higher tax rebate.

This will hopefully make it worth making the extra effort when making your claim.

Key Takeaways

Tax relief rules exist to help employees recover legitimate work costs. Your diligence in claiming what you’re entitled to makes sound financial sense.

Understanding the regulations and time limits could put hundreds of pounds back in your pocket each year.

• You can claim tax relief on work expenses you pay personally, receiving 20% back as a basic-rate taxpayer or 40% as a higher-rate taxpayer.
• Expenses must be “wholly, exclusively and necessarily” for work – including uniforms, business travel, professional subscriptions, and working from home costs.
• Use HMRC’s online iForm or postal form P87 for claims under £2,500; larger claims require Self Assessment.
• Keep detailed receipts, mileage logs, and your employer’s PAYE reference number as evidence – flat-rate allowances don’t need receipts.
• You have four years from the end of each tax year to claim, allowing you to recover historical expenses you may have overlooked.

The key is maintaining proper records and understanding that you won’t get the full amount back – just tax relief at your personal rate.

With the new digital claiming system, recovering these legitimate work expenses has never been more straightforward.

Tax Relief for Expenses of Employment FAQs

Can I claim tax relief for personal protective equipment? HMRC does not allow tax relief on PPE bought for work purposes. They state that your employer should either “give you PPE free of charge” or “ask you to buy it and reimburse you the costs”.

Does claiming tax relief for expenses affect my employer? Claiming tax relief for job expenses does not affect your employer. A claim is made directly with HMRC and any refund of tax is repaid from income tax you have paid personally.

How do I claim tax relief for my work expenses? You can claim tax relief for work expenses using HMRC’s online iForm or by filling out and posting form P87. For claims over £2,500, you’ll need to use self assessment. Ensure you have your employer’s PAYE reference number and relevant receipts or evidence to support your claim.

What types of expenses can I claim as an employee? As an employee, you can claim tax relief on expenses that are “wholly, exclusively and necessarily” for work. This includes costs for uniforms and work clothing, business mileage and travel, professional fees and subscriptions, working from home expenses, and certain tools required for your job.

Do I need receipts for all my expense claims? For most expense claims, you’ll need to provide receipts or other evidence of payment. Always keep detailed records, including receipts, mileage logs, and proof of necessity for your job. Flat rate claims expenses like the £60 annual uniform allowance don’t require receipts.

Will my tax code be affected by claiming employee expenses? After a successful claim HMRC typically modifies your current tax code to include your expenses. This reduces your tax payments moving forward and means you don’t need to claim for the same expenses each year.