Employment expenses

Introduction

Employment expenses are expenses that you incur, or your employer incurs on your behalf, in the performance of your work or your employment duties.

The rules for claiming tax relief for personally incurred expenses are very strict. The general rule is that they must be incurred ‘wholly, exclusively and necessarily’ in the performance of your duties. This means that any person performing your role would have to incur the expenses and that the expenses are incurred while you are performing your duties rather than to put you in the position where you are able to perform those duties.

So, the cost of clothing would not normally qualify for tax relief even if you have to wear clothes to work that are different from those you would normally wear. But if you need to wear special clothing that is not supplied by your employer, for example specialist footwear in the construction industry, you may be able to claim tax relief on the cost – see below.

On the same basis, travel costs from home to work would not normally count as expenses you can get tax relief on, although there are exceptions to this. We explain more about this on our page employment expenses: travel.

Employer paid or reimbursed expenses

If you are an employee, your employer might pay or reimburse your employment expenses. 

If your employer pays for or reimburses your employment expenses, you cannot get tax relief, because you have not personally incurred any expense. Instead, provided the expenses are allowable expenses, the amounts should be paid with tax and National Insurance contribution (also known as NIC) relief given automatically – that means, your employer does not have to deduct tax and National Insurance contributions from any amount they reimburse you. In addition, your employer does not need to report the expense payments to HMRC and no further action needs to be taken.

Expenses qualify for relief from tax and National Insurance Contributions if they are of a type that would qualify for relief in the hands of an employee – see below – and are not part of a salary sacrifice arrangement. It can also apply to subsistence expenses paid or reimbursed during the course of business travel where the employer pays them at scale rates – provided they check that the business travel has been undertaken. 

Some expenses are exempt from tax and/or National Insurance contributions under different rules if paid or reimbursed by an employer – for example, business mileage, passenger payments or personal incidental expenses if staying away from home on business. 

An example is passenger payments. If an employee travels 100 miles in his own car to a work conference carrying a fellow employee, then he can be reimbursed 5p per mile (£5) on a tax and National Insurance contributions-free basis by his employer. However, another employee in exactly the same circumstances who is not reimbursed, cannot claim a £5 deduction from his wages for tax and National Insurance purposes.

Tax relief for personally incurred expenses

If your employer does not pay or reimburse your expenses, you may be able to claim certain expenses as a deduction against your employment income and get tax relief as long as you are a taxpayer.

There are various rules governing the tax treatment of deductible employment expenses. As we said in the introduction, the general rule is that they must be incurred ‘wholly, exclusively and necessarily’ in the performance of your duties. In addition, there are some instances where expenses are specifically allowable, for example, for some travel and professional subscriptions. 

The tax relief works by taking off the amount of the expense from your employment income. This reduces your taxable income and the tax you have to pay. This is why they are sometimes called ‘tax deductible’ or ‘allowable’ expenses. You may have to make a claim to obtain this tax relief. Below we consider different types of tax-deductible employment expenses and explain how you can claim tax relief on these. 

Note that even if tax relief is available, no National Insurance contributions relief is available.

Common types of expenses

Special tools and clothing

The cost of normal, everyday clothing is not a tax-deductible expense, even if you wear it to work. HMRC have agreed, however, that employees in a range of industries can claim tax relief on fixed amounts for the upkeep of tools or any ‘specialist’ or protective work clothes which are not paid for by the employer – these are known as flat rate expenses.

‘Specialist’ work clothes can include a uniform. To count, it must be something that clearly is a uniform. What this means is, if you were out in the street, a member of the public would recognise you as wearing a uniform. If you are required to wear clothing branded by your employer, with logos or the company name etc, this would also be a uniform; but a detachable badge would not be enough to turn ordinary clothing into a uniform.

You can find out how HMRC define a uniform in their Employment Income Manual on GOV.UK.

You cannot usually claim for the initial cost of buying tools and specialist or protective clothing. Instead, you can claim for their upkeep, for example, repairing, cleaning or replacing them. You should remember that even if you only use your own washing machine at home to clean your specialist or protective clothing, there is a small cost to you associated with this in terms of electricity, detergent, etc. The flat rate system is therefore useful, as you do not have to work out or keep a record of the individual amounts you spend.

This is a relief that is often not claimed, because it is not widely publicised, but it can be very helpful for certain people, such as agricultural workers, public transport workers, labourers and healthcare workers. You can find the full list of the flat rate amounts on GOV.UK (within HMRC’s employment income manual).

You simply claim the amount shown on the list for your type of industry or occupation (the amounts have been calculated according to the annual cost of repairs, cleaning, etc. for each occupation type and have been agreed with trade unions and representative bodies). Alternatively, you can claim tax relief for the actual amounts you spend, but you need evidence of your expenses (receipts for repairs, etc.) to do this.

Even if your industry or occupation is not on the list, you may be able to claim a standard £60 allowance per year for the cost of upkeep and replacement of specialist or protective clothing. There is more information in HMRC’s Employment Income Manual. The tax reduction you get is usually 20% of the allowance, so UK basic-rate taxpayers can claim £12 tax back per year (20% of the £60 standard allowance). As you can claim tax relief going back four years, if you are a UK basic-rate (20%) taxpayer you could possibly receive a tax refund worth £48 as well as getting your tax code adjusted for the current and future years – the relief will be given automatically in your pay packets so you will not need to claim again (although you should make sure you check your PAYE coding notice carefully to ensure that the relief has been ‘coded in’).

Professional fees and subscriptions

Professional fees and subscriptions are allowable deductions if they are amounts you have to pay to carry on your profession. These are set out in the relevant law (which you can find on the legislation website) and include health professionals, lawyers, vets, driving instructors, architects and teachers. HMRC also allow annual subscriptions to certain professional organisations approved by them, even where they are not required by law in order to practice. You can find the list on GOV.UK.

Other tax-deductible expenses

For more information on tax deductible employment expenses go to GOV.UK.

You will see ‘Buying other equipment’ is a heading in HMRC’s guidance. However, in terms of ‘equipment’, HMRC say in their manual that that it would be rare for equipment that someone buys to do their job to be allowed under the general rule. This is because usually such expenditure puts the person in the position to perform their duties, and is not incurred in the performance of duties. However, in their technical manual, HMRC also say that capital allowances might be due instead for depreciation related to business use of equipment, as the restrictions/rules for capital allowances are slightly different. In addition, they give a number of specific examples, including in relation to computers, in their guidance on GOV.UK.

The mechanism for such capital allowances relief is via the Annual Investment Allowance (AIA), which gives a 100% deduction in the first year, so the effect is the same as a ‘normal’ expense deduction. In addition, as we can see in their manual, HMRC say that a claim for capital allowances can be made on form P87 – tax relief for expenses of employment – where someone is not in self assessment.

See our guidance below on Working from home for information on office equipment. 

In addition, you may be able to get tax relief if you incur business travel expenses or use your own car for business travel.

Working from home

Reimbursed costs of working from home

Employers can make tax- and National Insurance-free payments to an employee in respect of reasonable additional costs incurred for working at home, for example, gas, electricity, etc. HMRC allow a tax- and National Insurance-free flat rate reimbursement of up to £6 a week (from 6 April 2020) if this is easier than having to work out actual amounts. Business telephone calls can be reimbursed on top of this. See below for information on internet costs. 

Costs that would be incurred regardless of whether you worked at home, such as mortgage payments, water rates or council tax, are excluded.

Unreimbursed costs of working from home

6 April 2026 onwards

If your employer does not reimburse you for any household expenses, it is no longer possible to claim tax relief for additional household costs that you incur because of working from home – including the flat rate claim of £6 per week that was previously allowed. This is the case even if you are ‘required’ by your employer to work from home.

Up to 5 April 2026

If your employer did not reimburse you for any household expenses, you could get tax relief for part of your household running costs if you were ‘required’ to work from home – that is, you were employed on the basis you work from home or have no choice but to work from home.

This could apply to you if it is written into your contract that your place of work is your home, or if you had to work from home because your employer does not have available office space.

In response to the coronavirus pandemic, HMRC confirmed they would accept the need to self-isolate and the national lockdown rules as meaning that you were ‘required’ to work from home for the purpose of meeting the rules. If your employer could not always accommodate you at the office (even though it was open) for reasons such as social distancing, this would also appear to be covered under ‘required’. HMRC’s guidance is in their Employment Income Manual on GOV.UK.

You could claim based upon a proportion of your actual household running costs (see example below), if you kept records of them all and the extent to which you used your home for work. However, as this can be difficult, HMRC allow a claim for up to £6 a week (from 6 April 2020 to 5 April 2026) as a flat rate expense. There is more information on GOV.UK.

As an easement, in 2020/21, 2021/22 and 2022/23, even if you only worked from home for part of the year due to the coronavirus pandemic, we understand that you can claim £6 a week for the full tax year (so a deduction of £312 for each tax year).

Actual energy costs 

HMRC do not provide exact guidance on how a calculation of energy costs should be done – but to be fair and reasonable, HMRC would probably expect you to take into account your usage, the proportion in terms of area of the home and how long it is used for work purposes as compared to any other use.

Example: calculating actual energy costs

For example, you have 5 rooms in your house and use one as a home office for 8 hours a day (your family use it to watch TV in the evenings). Your gas and electricity bill for the year is £4,000. Your starting point would be £800 (£4,000 divided between the 5 rooms in your house). If you work full time, you typically have 230 workdays in a year (365 less weekends and holidays) so divide 800 by 365 and then multiply it by 230 to get closer to your actual annual work expense (£504). To take into account that the room is used for a few hours each evening for your family to watch TV, you would further prorate it by 8/10 hours (say), giving you £403. This is the amount of the expense on which you would claim tax relief.

Home working arrangements

If you are not ‘required’ to work from home but work regularly from home by arrangement with your employer, this is called a home working arrangement. These arrangements need not be in writing and need not involve all employees. The tax rules that apply here used to differ from those that apply when an employee is ‘required’ to work from home, but they have been aligned since 6 April 2026, that is, reimbursements from the employer as set out below qualify for relief from tax and National Insurance contributions in both scenarios.

Where there is a home working arrangement, and you are incurring additional household expenses, your employer can reimburse you on a tax- and National Insurance-free basis for any reasonable additional household expenses that you pay out. HMRC allow a tax- and National Insurance-free flat rate reimbursement of up to £6 per week (from 6 April 2020) if this is easier than having to work out actual amounts. There is more information on GOV.UK.

In home working arrangement situations, the exemption only applies to payments your employer makes. You cannot claim tax relief for any unreimbursed expenses by deducting them from your income.

You can read more about home working arrangements in HMRC’s technical manual.

Informal home working

If an employee only works at home informally/occasionally, no relief is available for home working expenses, whether reimbursed or not.

Other tax implications

If you work from home, you may expose your home to business rates rather than council tax, although this is unlikely if there is just minor ‘business’ use.

If you work from home, there may be an impact on the eligibility of your home for private residence relief for capital gains tax. HMRC have guidance on this. Note that if you use a room for both business and private purposes, this will not affect the availability of capital gains tax relief.

You will find information on what travel expenses you may be able to claim as tax deductible if you have to travel for work while you are based at home on our page employment expenses: travel.

Office equipment

In general, you cannot claim tax relief from HMRC if you buy home office equipment to use while you are working from home, such as an extra computer screen, or a desk and office chair. HMRC will not allow tax relief for these items as part of an expense claim. You may be able to claim capital allowances via a tax return in some circumstances. There is more information above under the heading Other tax-deductible expenses and on GOV.UK.

The reason is that expenses you incur in connection with your job have to meet a test to qualify for tax relief. This test is that the expense is incurred ‘wholly, exclusively and necessarily in the performance of your duties’.

The part in bold above stops you from getting tax relief via an expense claim for buying a desk or chair, for example. You may have bought these items to put you in a position to do your job, or – quite literally – a better or more comfortable position to do your job. This is the subtle but important difference – whether the purchased item enables you to do your job, rather than the expense being incurred while doing your job.

Things like printer cartridges and paper are different, as these are items you use while doing the job itself. For example, your work might involve writing a letter that you need to print out and post. The cost of the ink, the paper, the envelope and the stamp are all necessarily incurred by you in doing the job. These items would normally be reimbursed by your employer, but if they were not, you could make a claim for tax relief.

Internet costs

So far as internet costs are concerned, there is a difference between someone who already has broadband before starting a new employment which requires them to work from home or starts a home working arrangement and a person who subscribes for broadband afresh when they start the job/the home working arrangement.

The first situation cannot be treated as if you have any additional expenses, because you are using an existing subscription and the cost would be the same whether or not you work from home.

In the second case, you can be reimbursed a reasonable amount on a tax- and National Insurance-free basis (or the £6 per week flat rate amount) provided the internet is then used mainly for business purposes, with insignificant private use. There is more information on GOV.UK.

If you are ‘required’ to work at home, you can claim tax relief if your employer does not reimburse the allowable costs for tax years up to and including 2025/26. However, from 6 April 2026, you are not able to claim tax relief for unreimbursed costs, even if you are ‘required’ to work at home. If you work at home under a home working arrangement, you cannot claim tax relief.

Example: Jane – new broadband

Jane did not have a computer or broadband service when she started a new job that required her to work at home, so her employer provided her with a computer to use. Jane now subscribes for a broadband internet package, costing £25 a month. As a result of her employment, she incurs an additional household expense. Jane's employer can reimburse the full £25 a month cost of the subscription without any tax or National Insurance contributions (NIC) implications (or pay her the £6 a week flat rate amount). Note that if her employer does not reimburse the costs Jane can claim tax relief on the broadband costs for tax years up to and including 2025/26 as her employment requires her to work at home (or she can claim the £6 a week flat rate amount, if easier). For tax years 2026/27 onwards, if her employer does not reimburse the costs, Jane cannot claim any tax relief.

Up to and including tax year 2025/26, instead of claiming the £6 a week flat rate amount, Jane could claim all of the additional expenditure she incurs by working at home, although that might mean significant record keeping. If those extra costs were, say, £20 per month plus the additional £25 monthly broadband cost, her employer could reimburse her £45 per month tax- and National Insurance-free. If her employer did not reimburse these costs, she could claim tax relief on these costs. She cannot claim any relief for unreimbursed expenses incurred from 6 April 2026 onwards.

Example: Cara – existing broadband

Cara has an existing broadband internet connection used by all her family. She begins working at home under a home working arrangement and uses the existing broadband access in connection with her work. Unless Cara has had to change her broadband internet package to allow for increased usage, there is no additional household expense. Any refund of her costs for the broadband by her employer is taxable as earnings.

Example: Jake – second broadband connection

Jake has a broadband internet connection used by all his family. When he begins working at home under a home working arrangement with his employer, he takes out a second broadband internet subscription, that is, a second telephone line is broadband-enabled, for use in connection with his work. Jake has incurred an additional household expense as a result of the home working arrangement. His employer can make a tax- and National Insurance-free reimbursement of the whole of the cost of the second subscription or pay him the £6 a week flat rate amount. However, as Jake is working at home under a home working agreement, he cannot claim tax relief on the cost of this second subscription or any other additional household expenses if his employer does not reimburse the costs.

Claiming tax relief

You can find our guidance on how to claim tax relief for your expenses on our page Tax relief for employment expenses.

An important point to be aware of is that if you are not a taxpayer, that is, because your total taxable income is not more than the personal allowance, then unfortunately you cannot obtain any tax relief.

National minimum wage interaction

Ordinarily, there is no obligation on employers to reimburse their employees’ expenses although many will provide either full or partial reimbursement. If your employer does not reimburse your expenses, it is worth noting that if your hourly wage is on or around the minimum wage, there is some protection written into the national minimum wage rules. This applies where an employee incurs expenses in connection with employment that are not reimbursed by an employer. Essentially the rules say that where an employee incurs expenses in connection with employment that are not reimbursed by an employer the cost is not allowed to reduce their wages below the minimum wage. You can find more information on our page on the national minimum wage or in the HMRC technical manual.

Universal credit (UC)

The Universal Credit Regulations allow unreimbursed employment expenses to be deducted from income for Universal Credit purposes, so you should let the Department for Work and Pensions know about these.

To be deducted from income for Universal Credit purposes, expenses must follow the rules for tax purposes. They therefore include expenses ‘wholly, exclusively and necessarily’ incurred in the performance of the job, professional fees and subscriptions paid to an organisation approved by HMRC and travel and subsistence expenses.

Carer’s allowance

We look at the relationship between unreimbursed expenses and carer’s allowance on our page on benefits for carers.

More information

There is more information in HMRC's employment manual on GOV.UK about employment expenses incurred by employees and their reimbursements.

In addition, HMRC provide details on GOV.UK of how to get allowances and reliefs – the method can vary depending on whether or not you complete a self assessment tax return.

HMRC's Employment Income Manual contains technical details of deductible expenses for employees, including an A to Z guide: see EIM32400.