Flat rate expenses

Flat rate expenses, sometimes also called work-related expenses or flat rate job expenses, are a form of tax relief available to employees on any expenses they have incurred while at work.

Flat rate expenses can apply to those who work in trades and industries which commonly require essential work-related expenses. In many cases trade unions have come to an agreement with HMRC to set a standard amount to cover the annual cost of these ‘on-the-job’ expenses.

It’s important that you make a claim for any flat rate expenses you incur so as to avoid paying too much tax and potentially receive a tax rebate.

What counts as a flat rate expense?

The types of expenses that qualify as flat rate job expenses depends on what industry you work in. As a general rule though, flat rate expenses are things that you specifically need to your job and are not provided/paid for directly by your employer.

This can include:

• The purchase or maintenance costs of small tools (e.g. scissors, electric drills)
• Laundry and maintenance costs of essential work or safety clothing
• Construction Skills Certification Scheme card renewal
• Payment of professional fees or subscriptions

If you have incurred payments like the ones above while in the course of doing your job, then you are essentially out of pocket. HMRC’s flat rate scheme is a way to make it easy for you to claim tax relief on any work-related expenses.

Who is eligible to claim flat rate expenses?

Flat rate expense tax deductions can apply to anyone who works in a job that requires essential work-related expenses like the ones above. You can make a claim for your expenses from the past four years, as long as you:

• Have paid income tax in the year or years of your claim
• Not have the flat rate expense already in your tax code

How to make a claim for flat rate expenses

First of all, you can only claim for flat rate expenses if you are an employee. However, if your employer has already paid you back for your expenses then you will not be able to make a claim.

As long as those two conditions are not a problem you can submit a tax refund claim by filling out the P87 form. Once this has been sent and processed by HMRC your tax code will be changed to automatically provide flat rate expense relief each year – meaning you won’t have to keep making a claim every year. It’s worth noting though that if your expenses change then it is your responsibility to let HMRC know.

For more details apply online or call 0333 240 6122

How much is my flat rate expense refund worth?

The amount of rebate you can claim for your work expenses will depend on your circumstances. Unions have agreed the amount you can claim individually with HMRC, so it all depends on what your job is and what expenses you have incurred.

Annual flat rate expense refunds start at £60 per tax year, with the highest being £140 per tax year. When you consider that you can claim for the last four years then you could be in line for a substantial rebate.

HMRC have produced a table which shows all of the flat rate expense figures for different occupations. If your occupation isn’t listed then you may still be eligible to make a claim for the standard amount of £60:

For more information about expenses for the self-employed read our guide: List of allowable expenses for the self-employed

For more details apply online or call 0333 240 6122