According to a poll conducted by The Accountancy Partnership, 81% of small company owners have no idea what constitutes a valid business cost.
A substantial 65 per cent have previously failed to declare a cost, resulting in a loss of between £100 and more than £10,000. In reality, 35% missed out on a projected £100-£499 prize money.
For expenses incurred exclusively to fulfil contractual responsibilities, employees may sue their employer. HMRC defines this kind of company tax relief as using personal funds for travel or products needed for your employment.
Suppose you as an employer have previously given them an alternative. In that case, employees may not use this as an occasion to claim money for goods they bought outside of work or money they spent on items like office furniture, stationery, or even business assets.
So, what kind of work-related costs may your employees claim?
Many individuals are just unaware of what they are entitled to and are afraid to inquire about upsetting their employer. However, employees should claim expenditures incurred as a direct consequence of their contractual activities to avoid being out of pocket. Your workers should be aware of what they can claim and just how much they may be qualified for, as detailed in the following information.
Costs of mileage and trip
Employees that are employed in the B2B industry will spend a large portion of their time travelling to meet with clients and close deals. With so much time spent on the road, it’s critical that staff don’t spend money they don’t have on travel expenditures.
Mileage Allowance Relief may be available to you if you commute to work each day in your vehicle or motorcycle. Add up your company miles for the year and multiply it by the permitted mileage rates to figure out how much tax relief you’re due.
Equipment and tools
If you must acquire equipment to do work-related duties, you may be eligible for a tax credit. For example, if you were a hired mechanic, you would have to spend a lot of money on tools such as different sized spanners, sockets, jump leads, spark plugs, and other equipment to accomplish a task. Typically, you may claim a tax reduction of up to 18% of the cost of these things.
The tax relief that is uniform
Are you in charge of a corporate uniform’s washing and upkeep? You may also claim a working tax credit for expenditures spent carrying out extra work if you are obliged to launder a dedicated work uniform or protective clothes.
Fees for professionals
You’ll need to register as a professional for certain occupations and/or get a specific licence that permits you to legally perform your trade. While it is not required, your employer may suggest you join a professional organisation. These are two examples of subscriptions that are likely to contain some kind of yearly payment, for which you may be eligible for tax relief.
This list does not include all work-related expenditures that you may be able to claim back using tax reliefs available for workers working from home. Additionally, you may be eligible to claim back internet, phone and heating costs. For instance
How can I file a claim with HRMC?
The time has come to make a claim on work-related expenses, so where do you begin? If your claim is for less then £2,500, you must provide confirmation of all costs.
If your costs total more than £2,500, you’ll need to file a self-assessment tax return. You must fill out portions of this form with information such as your mileage expenditures and your yearly income from your present employment.
You may claim a tax refund for various costs using the same form, and if your information meets the conditions above, you will be evaluated for a tax reimbursement with the HRMC’s permission.
All of the topics discussed in this essay demand careful consideration. You might be losing out on a valid business cost claim or risk getting in trouble with your boss for claiming products that aren’t authorised. As a result, seeking guidance from a professional with specialist knowledge and expertise in approved tax refunds is always a good idea.