STOP Losing Money! How PAYE Employees Can Claim Tax Relief Online

On this week's I Hate Numbers podcast.

I'm gonna be looking at the topic of claiming tax

relief online, and this is geared for employees.

Now, if you are working as A-P-A-Y-E

employee, you may end up spending your own

money to do your job.

Sounds odd, but it does happen.

Also, you may not be reimbursed for that.

Now, if that's the case, then this

episode is for you.

Then why?

Well, it's because you might be missing

out on money that is legally yours.

I'm talking tax relief.

Specifically claiming those expenses and

doing it a nice, easy way online, I demystify

what expenses you can claim, how you go about

claiming them and what HMRC wants to see.

And by the way, you don't need to be an

accountant to get value out this podcast to

sit back, relax, and carry on listening.

The first thing, what is tax relief

on work expenses?

Let me begin with the basics.

If you're employed and as as an employee director,

whether it's full-time, part-time, or a mixture

and you pay for things out of your own pocket

to do your job, there's a possibility you might

be able to claim tax relief on that spend.

Here's the deal.

The expense, first of all, has to satisfy

certain criteria, and these are as follows.

The spend must be wholly, exclusively, and

necessarily incurred in the course of your job.

Now, this doesn't mean your lunch, your normal

daily commute, but things are directly connected

and tied to what you do.

Lemme share a few real life examples with you.

Let's assume you've gotta travel to a

meeting that is not your regular workplace,

so that's not part of your normal commute.

It could be you are paying for a professional

subscription, perhaps like a trade body or

a membership that's required for your job.

Your employer tells you you've gotta work

from home, and as a consequence, your energy

bills are gonna go up.

Now these are all examples where tax

relief is a possibility.

It may be on the cards.

Now let's go a little bit deeper and see

what you can claim.

And here's a quick checklist or some of

the more common items.

Firstly, let's have a look at

travel and mileage.

Now you can claim for travel outside of

your usual commute.

Things like meetings, site visits, or

temporary work locations.

You may be even using your own car,

and for that you can claim mileage.

If you happen to use public transport.

Instead, you can actually claim back

those ticket costs.

Now remember, your normal commute to the

office does not count.

Now let's also look at professional fees

and subscriptions.

Now, you may pay for a body or a trade group

that's linked and related to your work.

Think of trade unions, professional networks,

or governing bodies.

If it's on an HMRC approved list.

It's claimable.

Now, if your employer requires you to work

from home and you're not just doing it because

it's convenient and by choice, you can claim

back a proportion of your household costs.

Typically things like heating, lighting,

and broadband.

You need to be comfortable and convince

HMRC that working from home is a requirement

of your job and not just a nice thing to do.

Also.

You can claim for tools, uniforms, and

equipment, so purchase tools, specialist gear

work, clothing that your employer hasn't paid for.

You may be entitled to claim tax relief.

Now, typically this includes flat rate claim

for things like uniform maintenance or toolkits,

and HMRC has a list of approved occupations.

And the claims that can be made against

those occupations.

I want to introduce you now to what's

called the form.

It sounds very grandiose, and this is about

claiming online and it's going to be easier

than it was before.

So let's focus on how you go about making

your claim now.

For a while, age, Mar's online service

free expenses claims was closed.

And the reason for that is 'cause they

were updating it and rebounding it

with stricter rules.

Now, in that interim period, that downtime,

the only way you could claim was to use a

form called P 87.

Typically it had to be sent by post, but

now the I four is back and it's live.

Now if your total claim is two and 5,000

pounds or less in a single tax year and

you're not required to do a self-assessment

tax return, you can claim online.

Check out the show notes for the link to the site.

I'll tell you what it is now, and it's

w.gov.uk/tax relief for employees.

Forward slash travel and overnight expenses

and bang, you are on the right page.

Now, if you do claim more than two and a

half thousand pounds, or you already do a

self-assessment tax return, so you might

be, for example, a higher rate taxpayer.

You may be somebody who's subject to

the higher income child benefit charge.

You may receive benefits in kind.

There could be a number of reasons there, then

you will need to claim for your tax return.

Now, in simple terms, if the claim is two and half

thousand pounds or less, and you do not complete

a self-assessment return or liable to do one,

use the form online.

If it's more than two and a half K, or

you are already in the self-assessment

regime, then do it via your tax return.

We've got a mix of clients.

We do it both ways.

Now we need to now talk about the new

evidence requirements.

So let's drill down to the important

bit here, the proof.

Now, understandably, HMRC will want proper evidence

to support your claim.

So what does that actually mean?

Well, if we're talking professional

subscriptions, you'll need a receipt, a bank

statement, or payment proof, and it must show

what you've paid and who you paid it to.

So typically the name of the body.

The amount you paid and the date it was paid.

Now, when it comes to mileage claims, make sure

you've got a mileage log.

Include the date that the travel took place,

the reason you undertook the journey, postcodes

of the start and the endpoint and the total

mileage traveled.

So for example, if you've traveled on the

15th of March, it'll be 15th of March,

traveled from postcode NG one to LS one.

Obviously I've made these up.

Client visit.

85 miles return.

Now as a side note by those folks, your

employer may already reimburse you for minus,

but they might give you at a rate below what's

called the statutory rate of 40 5:00 PM r for the

first 10,000, and then 20 5:00 PM r. Thereafter, if

they have underpaid you.

As such, you can still make the

additional claim.

Now let's look at working from home.

So you need some form of proof, evidence that

working from home isn't just a decision to

make your life easier, but perhaps a letter

from your employer.

Or your contract should suffice, and

there's gotta be a requirement that you've

gotta work from home.

Now, other expenses, receipts are a must bank

credit card statement showing the payment

what it was for, and it's got to be made

by you and not that's paid by your employer

or one that you've actually had reimbursed.

Now, one area where evidence isn't directly

required is flat rate expenses, so things

like uniforms, tools, if you're an engineer.

If you're a mechanic, protective gear provided,

HMRC recognizes the role you are in.

And remember, it has a list of approved

professions for which there have

been agreements on those claims.

So we've got a mix of clients from airline

pilots down to mechanics, and there's gonna be

different allowances made depending on

the occupations that you are in.

Now, natural question is, can you actually

backdate the claim?

So if you've only come across this,

it's lightly.

That you may not have been claiming

for prior years.

And the good news is, yes, you can.

You can play catch up and you can backdate

your claim for up to a four year period.

So if you forgot or didn't realize

you're eligible, don't worry at all.

Just make sure you've got the right information and

the records for each year that you are claiming.

What you must try and avoid.

These are the common mistakes, and these are

mistakes people normally make when they're

claiming expenses.

Claiming for ordinary commuting, do not do

that as classified as private mileage.

Your usual journey to work is not allowed.

When you've got a lack of evidence, receipts

or records are missing, you may lose the

claim, but remember, you still can make

reasonable judgements.

So if, for example, you haven't kept a

detailed diary of your mileage, or you can

look at your diary.

To see where you've gone.

Use something like AA Route Master or Google

Maps or Equivalent, and you can work the mileage

out on that basis.

If you submit the same expense more than

once, you claim for personal purchases

like normal, everyday clothing, jeans, or

everyday office supplies.

So stay on top of it.

Stay honest, stay accurate.

And you'll be fine.

Let's quickly recap what we've talked about.

Now, if you spend money in your job and you don't

get paid back for that, you don't get reimbursed,

you may be able to claim expenses must be

wholly, exclusively, and necessarily

for work purposes.

Claims under two and a half grand can now

be made online via the new form, oh two

and a half thousand.

If you're already in self-assessment, do it

for your tax return.

Just different mechanisms.

Always provide the right evidence, receipts,

logs, contracts, bank statements, if you

do a flat rate claim, and you can also

claim a flat rate for working from home.

By the way, just make sure your

job is eligible.

Claims can be backdated for up to four years

and avoid claiming things like more

commuting to work and back missing records

on non-work items.

Now, if this is saturation point in your

head, don't worry, you're not gonna be a low.

Now, I hate numbers.

We help individuals and businesses get clarity,

stay compliant, and get what they're entitled

to back from HMRC.

If you've got questions, you wanna review

your past expenses or just want somebody to

chat to, to give you a guide through the

form, then look us up.

Look a call, and until then, folks,

stay sanguine and get those expenses kind.