HM Revenue and Customs (HMRC) has issued a warning to employees about claiming work expenses, urging them not to get “caught out” by third-party tax refund firms. In a post on X, formerly Twitter, the tax authority advised workers to avoid online ads and companies that charge commission for handling claims.
HMRC’s message read: “Looking to claim work expenses? Don’t get caught out by online ads and tax refund firms that charge commission to claim work expenses for you.” The authority then set out a three-step checklist: “Check: Find out what you can and can’t claim for. Recognise: Spot the signs of bad tax advice. Claim: Only directly through us.”
What can be claimed
Employees may be able to claim tax relief if they use their own money for items they must buy for their job, or if those items are used solely for work purposes. However, tax relief cannot be claimed if the employer reimburses the full cost or provides an alternative, such as a laptop when the employee would prefer a different model.
Where an employer has paid only part of the expenses, tax relief can be claimed only on the amount the employer did not cover. Claimants must have paid tax in the year for which they are claiming, and the tax relief amount cannot exceed the tax paid in that year.
How tax relief is calculated
Tax relief is based on the amount spent and the rate at which the employee pays tax. For claims relating to the current tax year, HMRC will usually adjust the tax code so that less tax is deducted from future pay. For claims covering previous tax years, HMRC will either adjust the tax code or issue a tax refund.
If an employee claims an estimated amount and the actual spending at the end of the tax year differs, they must inform HMRC. If the actual amount spent is lower than the estimate, they can notify HMRC by calling the helpline.
Advice for employees
The warning is part of HMRC’s broader effort to steer taxpayers away from commercial claims companies that often take a cut of any refund. HMRC emphasises that the process of claiming work expenses can be done directly and free of charge through its own channels.
Employees unsure about what they can claim are advised to consult HMRC’s official guidance before submitting a claim, and to be alert to signs of poor tax advice from unregulated firms.
