Your payslip has arrived again. You hurriedly tear it open. Almost as if a few extra 00s will appear next to your “net pay” bottom line or the monthly deductions such as National Insurance, tax, student loan repayments will have somehow reduced from the 30% of your gross pay it was last month, and the month before and the months before that. Your eyes settle on the net pay and it is what it always has been.
If you work as a Pay-As-You-Earn employee, there are ways to claw back some of your hard-earned money. The first method is to claim tax relief. This means that you are claiming the tax you would otherwise pay on certain expenses. The second is to ensure your tax code is correct.
A lot of employees working in specified professions are failing to claim tax relief that will boost their net pay. It is applicable to a wide range of careers from firefighters and bus drivers, to pharmacists and engineers. Flat rate deductions are essentially the set amounts that HMRC has agreed employees spend on average yearly in their different occupations and this tax relief can range from £60 to £185. The jobs are listed here. If your occupation isn’t listed, you may still be able to claim a standard amount of £60. The tax relief claims will need to be completed at the end of each tax year (ends every April) on a P87 form or on the government’s online tax service. Luckily enough, if you are eligible to claim and you haven’t done so in previous years, you can claim back the tax relief of at least 4 years.
Do you sometimes travel or stay overnight for work but not to your usual work location? If so, you may be able to claim tax relief for the mileage used, transport costs, hotel accommodation, food and drink, congestion charges and tolls and even parking fees. The money you spend on food and overnight expenses are seen as “subsistence”. Most employers provide a limit on the amount they are willing to pay back on what you spend when at a work event. E.g. a conference or training event. For those employees who are not granted this and those who go over their limit, the HMRC allows you to claim tax relief on such expenses via the same route as flat-rate expenses. For example, you spend £50 for food and drink one night. If your employer’s limit is £25, they pay you back the £25 and you can claim tax relief on the remaining £25. For these expenses, you will need to keep records and receipts.
Professional subscriptions and fees
The same applies to fees and subscriptions you may pay to approved professional organisations that is not reimbursed by your employer. A list of the approved organisations can be found here.
Check whether you’re paying the right amount of tax
The nature of the game is that sometimes HMRC won’t be quick to tell you if you’re paying too much tax or have paid too much tax for previous years. Sometimes you receive a tax refund at the end of each tax year if you pay too much tax. Sometimes you don’t. This has resulted in thousands of pounds being left unclaimed for, year in, year out. Check out how much you may be due back here. Here's to hoping it's an amount that makes a difference to that bottom line.