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How to get allowances and reliefs - employees or directors

If you're an employee or a director, there are a number of 'tax deductible' expenses you might be able to get. These include the cost of professional fees or subscriptions, business travel and subsistence, tools and specialist clothing. You can go back several years to get tax relief for expenses.

Allowable expenses

You can only get tax relief for allowable expenses. Expenses are allowable if they're for the cost of:

  • travelling you had to do whilst doing your job
  • other expenses you had to pay whilst doing your job - and which related only to doing your job

You can't ask for tax relief if your employer has already reimbursed you for the expense and has agreed a 'dispensation' with HM Revenue and Customs (HMRC).  

You can find out more about the types of expenses that you can get relief for using the link below.

How you get tax relief for your allowable work expenses depends on whether or not you fill in a Self Assessment tax return.

Getting tax relief for expenses if you don't fill in a tax return

If you don't have to fill in a tax return, you can get tax relief for your allowable expenses by:

  • letter
  • phone
  • filling in form P810 Tax Review
  • filling in form P87 Tax relief for expenses of employment

By letter

The first time you ask for tax relief for your expenses you'll have to contact HMRC in writing. If your expenses are over £1,000 they will ask you to fill in form P87 to give more details.

By phone

If you phone HMRC to ask for relief for your expenses, they will be able to give you tax relief if all of the following conditions are met:

  • your expenses are less than £1,000 (or £2,500 for professional fees and subscriptions
  • you've claimed them in a previous tax year
  • HMRC has accepted your earlier claim
  • you haven't already been sent a P87 to complete

If you meet the conditions they will give you tax relief right away and repay any tax you've overpaid. Otherwise, you'll have to fill in form P87 before they can allow your claim.

Form P810

Even if you don't have to fill in a tax return each year, HMRC may still need to check your income every so often to make sure you don't pay too much or too little tax. They do this by asking you to fill in form P810.

When you fill in form P810 you can use it to ask for tax relief for your allowable expenses. If your expenses are over £1,000, HMRC will ask you to fill in form P87 as well to give more details about your expenses.

Form P87

HMRC will send you form P87 if any of the following apply:

  • you ask them to
  • you claim expenses over £1,000
  • it's the first time you've claimed
  • you're claiming expenses for a year before the previous tax year

The form asks for details about your expenses and how you worked out the amount you want to claim.  

If you have more than one job, or if you change jobs during the tax year, you'll need to fill in a separate form P87 for each job.

If you don't fill in form P87 after HMRC sends you one, they won't be able to allow your expenses claim. This means that you might pay too much tax.

Time limits for getting tax relief

The time limits for asking for tax relief for your expenses are shown in the table below.

Time limits for getting tax relief if you don't complete a tax return

Tax year Tax year ended on You must claim by
2005-06 5 April 2006 31 January 2012
2006-07 5 April 2007 31 March 2012
2007-08 5 April 2008 5 April 2012
2008-09 5 April 2009 5 April 2013
2009-10 5 April 2010 5 April 2014
2010-11 5 April 2011 5 April 2015

Getting tax relief for expenses if you do fill in a tax return

You may have to fill in a tax return if:

  • you pay tax at higher rate
  • you're a director
  • you have other income you need to tell HMRC about

You can claim tax relief for your allowable work expenses on the employment page of the tax return.

If you claim tax relief for your allowable expenses on your tax return, you don't need to complete form P87.

Time limits for getting tax relief

The time limits for asking for tax relief for your expenses are shown in the table below.

Time limits for getting tax relief if you complete a tax return

Tax year Tax year ended on You must claim by
2007-08 5 April 2008 5 April 2012
2008-09 5 April 2009 5 April 2013
2008-09 5 April 2010 5 April 2014
2010-11 5 April 2011 5 April 2015

How you'll get tax relief for expenses - depending on the amount you claim

The way that you'll get relief for your work expenses depends on the amount of your claim.

Claims up to £2,500

If your claim is £2,500 or less, HMRC will normally give you relief for your expenses through your tax code straight away. If you claim an estimated figure, they will review it at the end of the year. They will make any adjustments that are needed in your tax code for the next tax year.

Claims over £2,500

If your expenses claim is for more than £2,500, HMRC will give you relief in your tax code for the current year and for the next one - and send you a tax return to fill in. They will also check your tax calculation for the previous year.

Tax evasion

People who don't pay their fair share of tax are being unfair on the rest of us.

 

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