Whether you have your own small business or work for an enterprise, you may be able to claim tax relief. You can make expenses claims if you are using your own money for travel or other things you might need to succeed in your job. To make this easier for you, there are loads of expense management apps and software out there. However, if your employer has provided you with an expense account and a budget, you can’t claim tax relief on the whole amount or at all.
So where does this leave you? What are you allowed to claim? What records are you required to keep filing?
Depending on the amount you are claiming, each tax relief procedure can be different. For example, any claims up to £2,500, you must use form P87. The HMRC will make adjustments needed through your tax code. If it turns out you can claim an estimated amount, then the HMRC will review it at the end of the tax year and make adjustments as needed. For your convenience, if your expenses are less than £1,000, you may be able to make your claim over the phone.
If you are claiming over £2,500, you must use a self-assessment tax return for all claims. The HMRC will give you tax relief through your tax code for current and the next tax years and you’ll be sent a form to fill out so that your calculations for the previous tax year can be checked and verified.
What can you claim tax relief on?
You may be able to claim tax relief on equipment that you buy, repair or replace such as a hammer or electric drill. When it comes to a uniform, you may be able to claim tax relief on cleaning, repairing or replacing it. You can’t, however, claim the initial cost of work clothing. If other equipment is required, you can claim Capital Allowances.
If you use your own vehicle for business travelling, you can claim fuel and mileage. You can’t claim anything if it’s your regular commute. Remember to keep all records of the dates and mileage of your work journeys, otherwise this information can’t be used as tax relief.
If you are using a company vehicle that has been provided for you, you are allowed to claim fuel.
If you are using multiple vehicles and they are the same type, combine your business miles. If the vehicles are not the same type, you’ll need to calculate them separately.
When travelling for work, you can claim tax relief on money you’ve spent for:
Food and drink
Congestion charges and tolls
Business phone calls, faxes and photocopies
These items do not apply if you are in the place you work, unless it’s temporary.
Working at Home
When working at home, you may be able to get tax back for some of the bills relating to work such as business calls, the extra cost of gas and electricity etc, but not rent. You only need to provide records if the claim is over £4 a week.
Whether you are self-employed or not, filing for tax relief isn’t always simple. You should be getting back the money you deserve for paying out of pocket. For more information, review the tax information at www.gov.uk.