Tax relief for employment expenses - online claims
Employees can claim ‘tax relief’ for some expenses incurred relating to their job. This article gives some pointers on what you might be able to claim, and how you go about it. We highlight a few pitfalls you might encounter with HMRC’s new ‘trial’ online form (which you still have to print off and post to them!).
If you incur expenses that relate to your job, your employer might pay you back for them. Often there is nothing further to do – your employer may well have an agreement with HMRC that no further reporting of the expenses is required and you will not hear anything further. But you may need to submit a claim to HM Revenue & Customs (HMRC) for tax relief on qualifying employment expenses if:
- you get a form ‘P11D’ reporting potentially taxable amounts of expense payments.
- your employer has not reimbursed any or all of your expenses, but they do qualify for tax relief.
Qualifying employment expenses can include the cost of professional fees or subscriptions, business travel and subsistence, tools and specialist clothing. For more information, read our section on employment expenses and benefits.
How to claim tax relief on employment expenses
If you do not have to complete a tax return, a claim can be made on form P87. Historically, this form has been paper based, but HMRC are currently trialling an online version. You complete the form on screen and it asks you further questions depending on the answers you give, thereby aiming to make things quicker and easier for you.
The interactive online version is a welcome development, but there are a few points to be wary of:
- You still have to print off the form and post it to HMRC. So you need to have your printer and paper on standby!
- You cannot save a copy of the form and come back to it partly completed. Make sure you have all information to hand before you start, including:
- The tax year your claim refers to.
- Your personal details including address, date of birth, and National Insurance number.
- Your employer’s details including name, type of business, address and employer reference number (you will find this on your payslip or P60). If you changed jobs during the year, you might need details for all relevant employments. [To note: if you do not have the ‘employer industry’ or your ‘employee number’ you should insert ‘unknown’ otherwise you will not be able to progress (we have alerted HMRC to this).]
- Details of the expenses you wish to claim including actual mileage, a breakdown of the professions, for subscription claims, and where you stayed, for hotel expenses.
- Your P11D, if you have one.
- Repayment instructions – that is, the payee and address you want your refund cheque to be sent to (you can have it paid to a nominee) or the bank account which you want it paid directly into (with bank name, address, account name, sort code, account number).
- You must sign and date the form before posting and you can review it before printing.
- You will also need to have installed the most up-to-date version of internet explorer or other browser.
Feedback on the online P87
We have already provided feedback to HMRC as to the limitations of this trial form P87 and suggested various improvements. We are concerned that this means some people may be unable to use the form (older systems perhaps not supporting the latest internet browser versions). Unfortunately, it seems that HMRC have already withdrawn the full, downloadable, PDF version of the form and only the trial online version is currently available. We have asked them to reinstate this until they have addressed the limitations of the trial version.