Understanding the New HMRC Policy on PAYE P87 Employment Expenses

I want to keep you on top of the latest updates from HMRC that may impact your self-assessment tax filings.

P87

Recently, HMRC issued a new policy paper detailing the evidence required to claim PAYE (P87) employment expenses.

This change is crucial for anyone looking to claim tax relief on employment expenses (like home office expenses, insurance or memberships etc), and I am here to help you navigate these new requirements.

From 14 October 2024, HMRC will require all taxpayers who wish to claim PAYE employment expenses to use a P87 form and provide supporting evidence to prove their eligibility before the claim can be processed.

Here are some common types of expenses that you may be eligible to claim:

1. Travel Expenses: Costs incurred for business travel, including public transport, fuel, and parking fees.

2. Subsistence Costs: Expenses for meals and accommodation when travelling for work.

3. Professional Fees and Subscriptions: Membership fees for professional bodies and subscriptions to trade journals.

4. Uniforms and Work Clothing: Costs for uniforms and protective clothing required for your job.

5. Tools and Equipment: Expenses for tools and equipment necessary for your work.

6. Home Office Expenses: If you work from home, you can claim a portion of your home expenses, such as heating, electricity, and internet costs.

7. Training Costs: Expenses for training courses that are necessary for your job.

8. Mileage Allowance: If you use your own vehicle for work, you can claim a mileage allowance.

This new approach aims to reduce the risk of ineligible claims and ensure that only those who are genuinely entitled to tax relief receive it.

HMRC has identified a growing number of ineligible claims for employment expenses, and to address this, they are implementing stricter evidence requirements to prevent incorrect payments and educate customers about compliance.

This proactive approach is designed to help you get your tax right the first time, rather than correcting issues after they arise.

If you plan to claim PAYE employment expenses, you will need to:

1. Use the P87 form to submit your claim.

2. Provide supporting evidence to prove your eligibility. This could include receipts, invoices, or other documentation that shows the expenses were incurred as part of your employment

HMRC will check all submitted evidence and confirm whether you are entitled to tax relief. It’s important to ensure that your documentation is accurate and complete to avoid any delays in processing your claim.

Kylene and myself are here to assist you with gathering the necessary evidence and submitting your P87 form. We will ensure that your claim is accurate and compliant with HMRC’s new guidelines.

If you have any questions or need further assistance, please do not hesitate to contact us.