The taxman’s taking all my dough

Date posted: 4th Nov 2018

As an employee, it can be easy to overlook tax reliefs that you may be entitled to, particularly if your tax affairs are straightforward and dealt with via PAYE.

Some of the main tax reliefs that employees overlook include:

  • Professional subscriptions – if you are a member of an HMRC approved institute and pay a subscription which isn’t reimbursed to you, by your employer, then you may be entitled to claim tax relief on the cost.
  • Mileage allowances – many employers reimburse their employees for business miles at the HMRC approved rates, however, some do not and where you are paid less than the HMRC rates for mileage, you may be entitled to claim some tax relief.
  • Clothing and tools – if you work in a particular industry, you may be required to wear uniforms or specialist/protective clothing. You may be able to claim some tax relief for the maintenance and cleaning of these items, if your employer does not reimburse you for the cost incurred.
  • Working from home – if you are required by your employer to work from home, then you may be entitled to claim some tax relief for the increased household costs that arise due to working from home.

Higher rate tax taxpayers can also claim additional tax relief for:

  • Pension contributions – if you made an actual pension contribution of say £1,000 in a tax year, this would be deemed to be £1,250 for tax purposes (to give effect for the basic rate tax relief). You could then claim an additional 20% of tax relief (to claim the additional higher rate tax relief) on the ‘gross’ pension contribution of £1,250 which would be £250. With many taxpayers paying into employer’s auto enrolment schemes, there will be lots of individuals missing out on this higher rate tax relief.
  • Gift aid donations – these work in a very similar way to pension contributions – many individuals will be paying charitable donations to fundraising coffee mornings and to friends, relatives and colleagues through JustGiving etc. Again, we would imagine that there will be lots of individuals missing out on this additional higher rate tax relief.

You may be able to backdate any claim for four years, so this could be a worthwhile exercise to undertake.

If you have any queries about these tax reliefs or any other tax reliefs to which you may be entitled, contact us today.

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