Claims for PAYE employment expenses not reimbursed by the employer now automatically face greater scrutiny by HMRC.
Each year, many employees claim tax relief for job-related expenses, such as subscriptions to professional bodies, business mileage, or travel and subsistence costs, and evidence of expenses must now be provided when a claim is made. This is part of a clampdown on ineligible expense claims, and the new approach sees HMRC checking and confirming eligibility before claims are progressed.
From 23 December 2024, there is a new online Form to use both to claim and submit evidence. The online route comes after some months where claimants have had to download form P87 from gov.uk, and submit it postally. Whilst postal claims can still be made, HMRC expects that the online route will make life easier.
Claims for Flat Rate Expenses for uniforms, work clothing and tools can be made online, and though not requiring evidence, will also face greater scrutiny.
Employees claiming expenses of more than £2,500 do so via self-assessment. Though there is no change to the actual procedure involved for this, HMRC advises
that it has begun compliance projects looking at claims submitted under self-assessment, checking their eligibility and asking for further evidence. Supporting evidence should therefore be carefully retained in all cases.
If you would like to speak with one of our specialist advisers and discuss this further, please email solutions@ellacotts.co.uk or call us on 01295 250401.
* Information for readers: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore, no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.
Business Newsletter – February 2025
