It was recently announced that the average pay in the UK had increased throughout 2020, with this leaving some economists scratching their heads given the overall state of the national economy.
On top, some of you may be able to access some tax relief on your earnings by claiming viable workplace expenses. But what are tax-deductible expenses and what exactly can you claim for?
What are Tax-Deductible Expenses?
As the name suggests, tax-deductible expenses refer to job-related costs and pay-outs against which you can claim tax relief. This will always pertain to the precise amounts that you have been required to spend, and in some cases, you may even be able to reclaim the full value of the pay-out (we will have a little more on this later).
Claims can usually be made in instances where you have covered the initial cost yourself without any subsequent reimbursement. Similarly, you can make a further claim if your employer has covered the initial expense but you’ve since been taxed on the reimbursement.
Therefore, certain expenses are described as tax-deductible, as you can claim relief on certain pay-outs that are directly associated with your job or place of work.
However, this isn’t the same, and receiving the item for free, as in many cases, you can only claim the basic tax-rate that you’re charged as an employee.
So, if you buy something work-related for £100 and you’re a basic rate taxpayer, you can formally claim £20 relief back in expenses.
Interestingly, you won’t be able to claim relief on purchases in instances where your employer has offered a viable alternative. This would apply to items such as safety equipment, which employers are required to provide to staff members by law.
What Can You Claim For?
Some of the most common claims revolve around public transport costs (particularly when traveling for business-related purposes), business calls, accommodation, and the amounts paid towards uniform and safety equipment.
In terms of uniform or safety equipment, these should be provided to you by the employer, whether you work in a supermarket or require specialist footwear to work on construction sites or a similarly industrial setting. However, the subsequent cost of cleaning of these garments (where appropriate) and maintenance of equipment is eligible for tax relief, and this can be claimed directly from the employer.
Most recently, we have also seen that HMRC has agreed that workers in certain occupations can deduct a flat-rate allowance when claiming expenses, with this having been welcomed by employees across the UK.
The industries that are subject to this include NHS and prison staff, police officers, and firefighters, while agricultural workers are also entitled to flat-rate tax relief on their purchases.
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