Tax relief can be claimed by employees where they are not fully reimbursed for certain costs incurred as part of carrying out their employment duties. Common examples include the cost of using their own vehicle for business travel, paying professional subscriptions, and costs relating to uniforms and tools. To be eligible for tax relief, expenses must be purely work-related and usually must be incurred by all employees in the same role. 

Many employees are likely to incur eligible expenses at some point which their employer has not reimbursed, and agents claiming to specialise in securing tax refunds for employment expenses have sprung up to service this demand. They often advertise online or through social media and normally charge a fee or commission based on the tax relief claimed. Unfortunately there have been numerous instances of incorrect claims being made by such agents, often without the employee’s full understanding, which leave the employee having to pay their tax refund back to HMRC as well as being left out of pocket by the agent’s fee. 

To tackle this problem, HMRC have created a guidance hub covering employment related expenses. This includes links to check what employment expenses can qualify for tax relief along with advice on how employees can claim any available tax relief themselves, without needing to use a repayment agent. 

The service also offers advice on the warning signs to look for if employees are approached by a third party offering to claim tax refunds on their behalf, or if they see adverts online for this type of agent. Common ‘red flags’ include:
•    A refund that seems too good to be true;
•    Being asked to sign a blank tax form; and
•    Not being asked for receipts or other evidence to back up employment expenses.

How employers can help

Employers can play an important role in helping their staff understand the tax relief available for employment expenses, and in helping them steer clear of bad advice. 

HMRC have published resources to support employers, including wording to add to internal emails and intranet pages, as well as posters and cards to help employees understand and claim the tax reliefs they may be entitled to.

 

This article reflects the position at the date of publication shown above. If you are reading this at a later date you are advised to check that that position has not changed in the time since. 

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