As an employee you may think that your entitlement to tax relief is limited. In some ways you are right but there are reliefs available so make sure you are making the most of them and fully claiming what you are entitled to.
Firstly, if you undertake business mileage in your own vehicle for which your employer pays you mileage, you can claim relief if the amount your employer pays you is below 45 pence per mile (for the first 10,000 miles) and 25 pence per mile (for all miles in excess of 10,000). For example if you undertake 11,000 business miles per annum and your employer pays at a rate of 30 pence per mile, you receive 11,000 x 30p = £3,300 but are actually entitled to receive 10,000 x 45p = £4,500 and 1,000 x 25p = £250, ie £4,750 in total
Therefore you are entitled to claim tax relief on the shortfall of £1,450. However, please be aware that amounts received in excess of the rates of 45p and 25p respectively are taxable.
Allowances are also available for business travel in motorcycles at 24 pence per mile for all mileage and at 20 pence per mile for business travel on a bicycle.
You may also be able to claim tax relief on buying, repairing or replacing small tools you need for your job, such as scissors, as well as claiming for cleaning, repairing or replacing specialist clothing, such as a uniform or safety boots. You may claim for what you have spent but will need to keep receipts or, instead, you can claim a “flat rate deduction” – usually much simpler and easier to administer as you don’t need to keep records of what you’ve paid for.
Flat rate deductions are set amounts that H M Revenue & Customs have agreed and are claimed by reference to your occupation. To find if your occupation is a qualifying trade view the full list at www.hmrc.gov.uk/manuals/eimanual/eim32712.htm
Some of the main occupations and deductions are :
n Agriculture: all workers – £100
n Uniformed fire fighters and officers – £80
n Food: all workers – £60
n Police officers: up to and including Chief Inspector – £140
n Uniformed prison officers – £80
Many industries have sub-categories such as constructional engineering and healthcare staff in the National Health Service, so check to see if your occupation qualifies.