Tax Relief on Employment Expenses

Practical accountancy with Allchurch & Co

Last year we wrote an article on employment expenses and what you can claim for as an employee, even though your taxes are taken care of via the PAYE system.

As a refresher you might be able to claim tax relief if:

  • you use your own money for things that you must buy for your job
  • you only use these things for your work
  • You cannot claim tax relief if your employer either gives you:
  • all the money back
  • an alternative, for example your employer gives you a laptop, but you want a different type or model

You must have paid tax in the year. You’ll get tax relief based on what you’ve spent and the rate at which you pay tax. For some claims, you must keep records of what you’ve spent. You must claim within 4 years of the end of the tax year that you spent the money. If your claim is for the current tax year, HM Revenue and Customs (HMRC) will usually make any adjust-ments needed through your tax code. If your claim is for previous tax years, HMRC will either make adjustments through your tax code or give you a tax refund.

We wanted to provide an update as given the current climate there may be a lot of individuals having no choice but to work from home. HMRC confirmed from 6 April 2020 “for ease of administration” it will accept that employees who are required to work at home can claim a deduction of £6 per week (£26 per month), without having to justify that figure, under ITEPA 2003 s 336. For years prior to 2020/21 HMRC will accept claims for deductions amounting to £4 per week (£18 per month).

This means that employees can submit claims to HMRC for homeworking expenses, without having to calculate the additional costs from their household bills or keep evidence of those costs. If the employee wants to claim more than the flat rate of £6 per week, evidence of the additional costs will be required.

If you want to discuss how to claim or how to claim for earlier years, then please don’t hesitate to get in touch.

Update on the Second Self – employed grant

Who can claim and how to do it

The second and final self-employed grant is available to claim now if you qualify. The grant is worth 70% of three months of trading profits, up to a maximum of £6,570 and to apply your business must have been adversely affected by COVID-19 on or after July 14th. The second claim must be made before October 19th 2020. All of the following must also apply in order for you to be eligible:

  • You must have traded in the tax year 2018/19 and submitted your self-assessment tax return on or before April 23rd 2020
  • Your trading profits from 2018/19 must have been no more than £50k and at least equal to your non-trading income
  • You must have traded in the tax year 2019/20
  • You must intend to continue trading in 2020/21
  • You cannot claim through a limited company or a trust

You’ll need to apply via the official govern-ment claims portal and you’ll need the following to claim:

  • Unique Taxpayer Reference (UTR)
  • National insurance number
  • Government gateway ID login details
  • Your bank details

This is a grant and does not need to be repaid as long as you meet the criteria.

However, you will need to declare it in your 2020/21 self-assessment tax return as it is subject to income tax and NI contributions. You can also continue to work, start a new trade or take on another employment (including voluntary work) whilst receiving the grant.

(Please note the information in our articles is for information purposes only. If you would like to discuss anything further, then please don’t hesitate to get in touch).

Allchurch & Co Chartered Accountants / / 07825 232218




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