What can you claim for tax relief if you are an employee? Certain types of employees are permitted to make fixed sum or flat rate deductions from their employment income. This is given by section 367 ITEPA 2003.
This is a freeview 'At a glance' guide to fixed sum allowances.
- The amounts that can be claimed are set periodically by the Treasury.
- The amounts are meant to represent the average annual cost of repair and maintenance of tools or special clothing. See HMRC's guidance for the current rates for different employees.
- In addition, an MOD laundry allowance applies.
- To claim a deduction, the employee should contact HMRC to ensure that it is included in their PAYE coding notice.
- Employees may also claim actual expenses but only with the agreement of HMRC.
- See Annual expenses for employees: How to claim
Tax treatments for particular occupations
In addition, HMRC provides some guidance on Special rules for certain employees' remuneration, benefits and expenses, covering:
- Agricultural workers
- Airline pilots
- Airline cabin crew
- Armed forces
- Arts Council of Great Britain (Tax treatment of awards and bursaries)
- Bank employees
- British Telecom employees
- Building and civil engineering employees
- Car mechanics
- Carers
- Census of population
- Local authority officials and employees
- Local Government Councillors and civic dignitaries
- Lorry drivers
- Merchant Navy Reserve
- Midwives
- Mineworkers
- NHS employees
- North Sea and other offshore oil and gas workers
- Nurses
- Parish and Community Council Clerks in England & Wales
- Police service
- Post Office employees
- Prison service
- Professional cricketers
- Public house managers
- Racehorse training or stud farm establishment employees
- Recorders, Circuit Judges and Deputy Circuit Judges
- Religious orders and similar bodies
- Returning Officers
- Royal Navy Auxiliary Service
- Royal Observer Corps
As part of its Taxation of employment expenses: response to the call for evidence, published on 1 December 2017, HMRC was asked to consider both increasing the allowances and combining various allowances to simplify the system. However, it was decided that no changes were required at that time.
Other expenses
- Employees may also be entitled to claim other expenses, depending on the nature of their work.
- See our Employee expenses section.
- Employers may also agree to pay fixed-rate allowances for certain types of expenses, such as travel and subsistence.
What's New?
- From 14 October 2024 HMRC introduced new procedures in relation to standalone claims for tax relief on employee expenses using Form P87: see Annual expenses for employees: How to claim.