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Job-related expenses that your employer paid or reimbursed during the tax year 2014/15 should not carry any additional tax liabilities – but you may need to claim the tax relief.

Introduction

Where your employer pays or reimburses expenses that are wholly, exclusively and necessarily to do with your employment, they may well have an agreement with HMRC that no reporting is required – meaning there is nothing further for you to do. But if your employer does not have such a reporting ‘dispensation’ they will have to complete a form P11D for HMRC, summarising the expense payments. You will then need to submit a claim to cancel out the tax charge that will otherwise be generated on them.

Form P11D

You should recently have received a copy of any P11D submitted to HMRC about you for the 2014/15 tax year. The deadline for your employer to send this was 6 July 2015 (although if you left an employment during the year you may have to specifically request a copy as your ex-employer is under no obligation to send it out to you otherwise).

What can I claim tax relief on?

Qualifying employment expenses can include the cost of professional fees or subscriptions, business travel and subsistence, tools and specialist clothing. For more information, read the section on employment expenses and benefits on the LITRG website (see Useful Links).

How to claim tax relief on employment expenses

If you do not have to complete a tax return, a claim can be made on form P87 – the new version of which you complete on screen before printing it out, signing it and sending it in to HMRC. There are a few points to be wary of when completing this new style P87 and these are summarised on the LITRG website.

If you need further help understanding and completing the form, you can also find an annotated example of form P87 in a new section of the LITRG website that deals with forms generally.

Alternatively, you could seek tax relief by writing a letter to HMRC – LITRG understands that HMRC will process a claim on the basis of a letter where the value of the expenses does not exceed £1,000. If you do this, it should be clearly headed S336 CLAIM. This will help HMRC identify the issue and deal with your case as quickly as possible. Your letter should say why you think you are entitled to tax relief for the year in question, and contain a signed declaration saying that the details you have given are correct and complete to the best of your knowledge.

In either case, the P87 or S336 Claim letter should have a copy of the P11D attached and should be sent to:

Pay As You Earn and Self-Assessment
HM Revenue & Customs
BX9 1AS

LITRG recommends that you keep a copy of what you send in for your records and that you use special delivery or similar so that there can be no dispute as to if/when HMRC received something.

Where the expenses incurred are less than £1,000, a claim by telephone may be processed by HMRC as long as a claim has been made and accepted for an earlier year. The number to call can be found on the GOV.UK website.

Is there anything else I should know?

You may find the following useful:

• LITRG has noticed there is a lack of information on GOV.UK about claiming tax relief for expenses that have been paid or reimbursed by an employer. The group will provide feedback to GOV.UK on this but in the meantime it is concerned that this means some people will turn to tax refund companies for assistance. Please note that despite the lack of information, it should be a straightforward process for a taxpayer to claim tax relief on P11D expenses for themselves – and you should not feel that you are doing anything unusual or difficult.
• You can claim tax relief on P11D expenses up to four years after the end of the tax year they relate to. So until 5 April 2016, you are still in time to talk to HMRC about the 2011/12 tax year if necessary.
• The 2015/16 tax year (i.e. the tax year we are currently in) is the last year that employees should have to apply for tax relief where their employer pays or reimburses employment expenses and then reports them to HMRC. This is because the Government is introducing a new system – essentially allowing an automatic exemption for employment expenses paid or reimbursed by employers – which should make things a lot simpler and easier all round.

Useful links

LITRG article with links to general article on employment expenses and benefits, to useful sections on forms generally and on Form P87 specifically, and to relevant articles on the GOV.UK website including HMRC contact numbers