Employment Expenses and form P87

Employers can choose to reimburse expenses incurred by the employee but if not the employee may choose to claim tax relief on those expenses.  For expenses up to £2500 employees can claim this through PAYE.

From 14th October 2024 HMRC will require the employee to complete form P87 for employment expenses.  There is also an additional requirement to provide evidence which will depend on the expense being claimed.  Claims submitted since 10th June have not been processed and HMRC will be contacting those with pending claims with the next steps.

From 14th October employment expense claims will no longer be able to be submitted digitally or via the telephone.  Employees will need to visit GOV.UK to check eligibility and to download form P87.  HMRC will be reviewing this process and it seems likely it will return to online in the future.  The current proposed timeline for online submissions is 31st October for uniform and April 2025 for all other expenses.

The reason for the change was concern about ineligible claims, preventing incorrect payments, but still needing to make payments where someone was entitled.

Usefull resources:

Evidence required to claim PAYE (P87) employment expenses - GOV.UK (www.gov.uk)

https://www.gov.uk/expenses-and-benefits-cash-sum-payments/rules-for-business-expenses

https://www.gov.uk/guidance/send-an-income-tax-relief-claim-for-job-expenses-by-post-or-phone