Changes to claims for tax relief on employment expenses
HMRC are introducing evidence requirements for claims for tax relief on employment expenses. These requirements come into force on 14 October 2024. As a result, HMRC are also making changes to the process for claiming tax relief on employment expenses. This is to try to ensure HMRC only pay tax refunds to taxpayers who are eligible for tax relief.
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What are the new evidence requirements?
From 14 October 2024, HMRC will (in most cases) require you to provide supporting evidence when you claim tax relief on employment expenses.
When you send supporting evidence with your claim for tax relief, HMRC will check it. If they are satisfied that you are eligible for the tax relief, they will process your claim.
Uniform, work clothing and tool expenses (flat rate expenses)
The only exception is where your claim is for tax relief on flat rate expenses only. You do not have to provide evidence to support these claims. HMRC will carry out checks to ensure they only give tax relief to eligible taxpayers.
What evidence do I have to provide?
You must tell HMRC which employment you incurred the expense for, if your employer reimbursed any of the cost, and how much of it your employer reimbursed. In addition, you must provide evidence of each expense. The type of evidence you have to provide to support your claim for tax relief depends on the employment expense.
Evidence may include copies of receipts that show the date of each expense and how much you paid. If you are claiming tax relief for mileage, HMRC will expect to see a copy of your mileage log. We provide more detail in our guidance on employment expenses.
If you are claiming tax relief for expenses for working from home, you must send HMRC evidence that shows that you have to work from home, for example, a copy of your employment contract.
HMRC have published a briefing, which gives examples of the types of evidence they expect for different employment expenses. See the heading Where can I find more information? below.
What changes are HMRC making to the claim process?
Currently (up until 13 October 2024), you can claim tax relief on employment expenses using a variety of different options, including form P87 (online through government gateway or on paper), online and by telephone. HMRC generally process these claims for tax relief without checking their accuracy. If they are concerned about a particular claim, they check it later.
There is more information about claiming tax relief on employment expenses on our page PAYE tax refunds.
Over the coming months, HMRC are making a number of changes to the claim process:
14 October 2024 to 30 October 2024
If you want to claim tax relief on employment expenses, HMRC will require you to do the following:
- Use a paper P87 form – you can download and print this from GOV.UK, or you can contact HMRC and ask them to send you a copy in the post
- Gather evidence, unless the claim is for flat rate expenses only, to prove that you are eligible for the tax relief
- Send paper form P87 and your evidence to HMRC by post.
HMRC will not process the claim for tax relief until they are happy that you are eligible.
During the period 14 October 2024 to 30 October 2024, it will not be possible to submit a new claim for tax relief on employment expenses using HMRC’s digital form or over the telephone.
You should continue to use HMRC’s online tool to check if you are eligible to claim tax relief on your employment expenses. See the heading Where can I find more information? below.
31 October 2024 onwards
HMRC will launch a limited online claim process for tax relief on flat rate expenses (uniform, work clothing and tool expenses) only. You will not need to provide evidence to support claims for flat rate expenses. You can continue to use the paper P87 for flat rate expenses if you prefer.
You will have to continue to use paper form P87 and provide evidence for all other employment expenses claims, as set out above.
You should continue to use HMRC’s online tool to check if you are eligible to claim tax relief on your employment expenses. See the heading Where can I find more information? below.
April 2025 onwards
HMRC intend to launch an online claim process for all other employment expenses. This will sit alongside the paper form P87 claim process.
You will still have to provide evidence when the full online claim process is launched, unless the claim relates only to flat rate expenses.
Where do I have to send the P87 form and evidence?
HMRC are asking taxpayers to send the paper form P87 and evidence to support their claims for tax relief on employment expenses to:
Why are HMRC making these changes?
HMRC are concerned that they have seen an increase in ineligible claims for tax relief on employment expenses.
HMRC want taxpayers who are eligible for tax relief to get that relief as easily as possible. However, they also need to spot claims that are inaccurate and where taxpayers are not eligible for tax relief. This will ensure HMRC only pay tax refunds to taxpayers who are eligible to receive them in the first place.
Normally, HMRC process claims for tax relief, and then check some claims if they identify a risk. This means that in general, they pay tax refunds without checking their accuracy and the taxpayer’s eligibility first.
Because of the risk they have identified in respect of claims for tax relief on employment expenses, they have decided to change their approach. This means they will check most claims first. Only once they are sure the taxpayer is eligible for tax relief will HMRC pay the tax refund.
What have HMRC already done?
On 10 June 2024, HMRC suspended processing some claims for tax relief on employment expenses. This means that if you submitted a claim earlier this year, you may not have received your tax refund yet. If your claim has been suspended, HMRC will write to inform you of the new evidence requirement. They will ask you to provide evidence to support your claim for tax relief.
Provided you are able to send HMRC evidence to support your claim, which they review and accept, HMRC will process the claim.
I want to claim tax relief on my employment expenses. What do I need to do?
If you wish to claim tax relief on your employment expenses, we would suggest you take a look at HMRC’s briefing. See the heading Where can I find more information? below.
You should complete form P87 to send in the post. It is important to include supporting evidence with your form P87 claim, otherwise HMRC will not process your claim.
It is fairly straightforward to complete a form P87 to claim tax relief on employment expenses. We have guidance, including an annotated form P87, on our website. See the heading Where can I find more information? below. We will be updating this guidance shortly to reflect the changes to HMRC’s processes.
If you do not think you can complete the claim form by yourself, you can pay a tax adviser. We provide guidance on using a professional tax adviser on our website.
Tax refund agents – a word of warning
We would urge caution when choosing a tax adviser. There are agents that specialise in obtaining tax refunds for people. However, some of these tax refund companies can charge very high fees. We are also aware of some tax refund companies submitting inaccurate or false claims. Such actions by tax refund companies can result in serious problems for taxpayers. We have guidance about tax refund companies on our website.
Where can I find more information?
HMRC have published a briefing that explains more about the new evidence requirements on GOV.UK.
There is guidance on how to claim tax relief on employment expenses on our website.
We have guidance on completing form P87 on our website.
There is more information on employment expenses in our guidance.
HMRC’s eligibility checker tool is available on GOV.UK.
You can download and print form P87 from HMRC’s guidance page on GOV.UK.
