HMRC have introduced new evidence requirements for claimants from 14th October 2024 to reduce the risk of ineligible expense claims.
They want to make sure that taxpayers receive the tax relief they are entitled to as simply as possible, but we also need to make sure that they identify where taxpayers are not eligible and prevent them receiving payments they are not entitled to.
When taxpayers send HMRC evidence for PAYE employment expense claims, HMRC will check it and confirm whether they are entitled to tax relief.
Expenses
Employers can choose to reimburse expenses incurred by an employee. If not reimbursed, the employee can claim income tax relief for allowable expenses from HMRC
Tax loss risk
HMRC have identified a growing tax risk driven by ineligible claims for employment expenses.
What has changed?
From 14th October 2024, HMRC require tax payers who want to claim PAYE employment expenses to use a P87 form and provide supporting evidence to prove their eligibility before they progress the claim.
Tax payers will no longer be able to submit a PAYE employment expense claim using the digital form or make a new claim over the phone.
For ‘uniform, work clothing and tool’ expenses, tax payers will be able to claim these online from 31st October 2024. For all other expenses, HMRC expect a digital claim route to be available by April 2025.
What about self assessment?
HMRC have also begun compliance projects looking at employment expenses submitted via Self Assessment (SA) returns. They will carry out checks on the eligibility of claims, asking for further evidence.
Types of expenses evidence is required:
- Subscriptions to professional bodies
- Mileage allowance
- Hotel and meal expenses (subsistence)
- Expenses for working from home
- Other expenses
- Uniform, work clothing and tool expenses (also known as Flat Rate Expenses)
PAYadvice.UK 14/10/2024