You may have heard about flat-rate expenses but have no idea what they actually are, or maybe this is the first time you have heard of them and are wondering whether they apply to you. We at DSR Tax Refunds are the tax experts you can trust, so check out our handy guide all about flat-rate expenses. If you think they apply to you, use our online calculator to see how much you could claim or call our friendly team on 0330 122 9972 and let us get you your maximum rebate.
So, what are flat-rate expenses?
These are sometimes known as work-related expenses and they are expenses that you might incur as a part of your job, that you can claim tax relief on. However, instead of claiming the actual cost of the expense, you claim a flat-rate expense set out by HMRC instead.
The idea behind flat-rate expenses are to make it easy for you to claim tax relief because you don’t need to worry about finding receipts or sorting out too much paperwork. These expenses might be for laundry costs, professional subscriptions or anything else you have had to shell out for to do your job. You can backdate your expenses claim for up to four years but going forwards, HMRC will adjust your tax code to take account of these expenses.
To claim these flat-rate tax relief amounts, you have to be an employee and have paid income tax in the years for which you are claiming.
How much are these expenses worth?
The amount you can claim for these expenses all depends on your job role and the expense itself. HMRC set the yearly flat-rate expenses that each occupation can claim, although if your particular occupation isn’t listed by HMRC, you could still be entitled to the standard flat-rate tax relief amount of £60 per year. So, for example, a uniformed prison officer is entitled to claim a flat-rate tax relief amount of £80 while a member of the ambulance staff on active duty is entitled to claim the flat-rate tax relief amount of £185.
HMRC also set a flat-rate tax relief amount for laundry costs per occupation.
What can you claim for as a flat-rate expense?
What you can claim for depends on the job that you do and it only applies to expenses that you have to incur to do your job – you can’t claim for it if you just fancy buying it but you can do your job perfectly well without it. You also need to pay Income Tax in the first instance – because this is a form of tax relief, you need to have paid the tax first.
These expenses could include:
Professional subscriptions or fees that you have paid for yourself and are required to do your job.
CSCS renewal for construction workers.
Essential safety clothing or uniform – this includes laundry costs and repairs.
Any small tools you need to purchase, clean or repair, which are essential to your job.
The key thing is that you have to have incurred the expense yourself. If your employer paid for these costs, or has already reimbursed you for the cost, you haven’t been left out of pocket and therefore you can’t claim the flat-rate expense. Nor can you claim if your tax code has already been amended to take account of these expenses.
You can only claim this form of tax relief if you are an employee and you pay tax through the PAYE (Pay As You Earn) system. If you are self-employed, either as a sole trader or as one half of a business partnership, you need to use Simplified Expenses instead.
VAT Flat-Rate Expenses
You can also claim flat-rate expenses for VAT in order to simplify your VAT returns but if you use flat-rate VAT expenses, you can’t claim back the VAT on purchases you make.
How do you claim your flat-rate tax relief?
If you are entitled to a flat-rate expense claim and haven’t claimed in the past four years then it couldn’t be simpler – just call our friendly team on 0330 122 9972 and let us take the hassle out of claiming for you. We take care of all of your dealings with HMRC so you don’t have to.