In a recent press release, Christmas bonus for millions of workers, HMRC encourages workers to claim a rebate on their expenses “and get an early present from HMRC”.
The press release is referring to the fact that employees who incur work-related expenses that are not reimbursed by their employers may be able to claim a tax deduction for these expenses and get a refund. HMRC refers in particular to workers such as nurses, hairdressers, construction workers and people working in the retail and food sectors, and to expenses such as car mileage, replacing or repairing small tools, or maintaining branded uniforms.
Workers are encouraged to check if they can claim at Claim tax relief for your job expenses. Claims can be made online via the Personal Tax Account, in which case HMRC says the claim, if approved, will be paid within three weeks, or by completing form P87 or by phone (0300 200 3300) – there are details online about how to claim.
We have a few concerns about this press release. It is of course true that employees may be unaware they could claim tax relief for some work-related expenses, and good that HMRC is publicising this. However, a lack of clarity in the release, plus the encouragement to claim right away in order to get the money by Christmas, may mean some people make hasty and incorrect claims and end up having to pay back some of their refund.
In particular, the press release refers to ‘workers’ rather than employees, and does not spell out clearly that such claims can only be made for expenses that are not reimbursed by the employer, and only if all the conditions for tax relief are met. The conditions may be less than straightforward for things like travel expenses. Having said that, HMRC does signpost taxpayers to more information on gov.uk.
As the press release notes, claims can be made within four years of the end of the relevant tax year – so, for 2014/15 onwards. If a person has four years of claims, this could be a considerable sum, so it is important to get it right.
HMRC encourages people to claim directly rather than use an agency, which should help people steer clear of unscrupulous repayment agents who make overstated claims, take a fee and leave the taxpayer to deal with any subsequent enquiries or tax demands. However, depending on the sums involved, it may be worth seeking advice from us or another a competent professional adviser. There is also useful information on the website of the Low Incomes Tax Reform Group.