Are you a PAYE employee spending your own money to do your job without getting reimbursed? You could be missing out on money that's legally yours through tax relief claims. This episode of the I Hate Numbers podcast breaks down everything you need to know about claiming work expenses online using HMRC's updated system.

We explore what qualifies for tax relief, walk through the new online claiming process, and provide essential evidence requirements to ensure your claims succeed. From travel expenses and professional subscriptions to working from home costs, we cover the most common claimable expenses with real-world examples. Whether you're new to expense claims or looking to catch up on backdated claims, this episode gives you the practical knowledge to recover money you're entitled to.

If you're an employee who pays for work-related expenses out of your own pocket, this episode will help you understand your rights and navigate HMRC's requirements with confidence.

Tax relief is available for PAYE employees who pay for work-related expenses from their own pocket without reimbursement. The key criterion is that expenses must be "wholly, exclusively, and necessarily incurred in the course of your job." This excludes personal items like lunch or your normal daily commute, but covers expenses directly connected to your work duties.

Travel and Mileage: You can claim for travel outside your usual commute, including meetings, site visits, or temporary work locations. When using your own car, claim mileage at statutory rates (45p per mile for first 10,000 miles, then 25p thereafter). Public transport ticket costs are also claimable, but remember - your normal commute to the office doesn't count.

Professional Fees and Subscriptions: Payments to trade bodies, professional groups, or governing bodies that are work-related and appear on HMRC's approved list qualify for relief. This includes trade unions, professional networks, and industry-specific memberships.

Working from Home Costs: When your employer requires you to work from home (not by choice), you can claim a proportion of household costs including heating, lighting, and broadband. The key is proving it's a job requirement, not just convenience.

Tools, Uniforms, and Equipment: Specialist gear, work clothing, and tools that your employer hasn't provided may qualify. HMRC offers flat-rate claims for uniform maintenance and toolkits for approved occupations.

HMRC's online service for expense claims has been updated and relaunched. If your total claim is £2,500 or less in a single tax year and you're not required to complete a self-assessment tax return, you can claim online at gov.uk/tax-relief-for-employees/travel-and-overnight-expenses. For claims over £2,500 or if you already complete self-assessment, use your tax return instead.

Understanding the April 2025 National Insurance Changes

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How Salary Sacrifice Works in Practice

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Eligible Benefits for Salary Sacrifice

Legal Requirements You Must Follow

Why Act Sooner Rather Than Later

Links Mentioned in This Episode

Making Tax Digital represents HMRC's ambitious plan to bring tax reporting into the digital age. Consequently, we're facing significant changes that will affect thousands of self-employed individuals and landlords across the UK. Moreover, these changes are no longer a distant possibility but a concrete reality with confirmed implementation dates.

Originally, MTD was scheduled for April 2024. However, the government revised the timetable in December 2022. Subsequently, we now have a phased rollout approach that gives businesses more time to prepare.

Specifically, the implementation follows this timeline:

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• April 6, 2026: Businesses earning over £50,000 annually from self-employment or property letting must comply
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• April 6, 2027: The threshold drops to £30,000-£50,000
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• April 6, 2028: Finally, those earning £20,000-£30,000 must join the scheme
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Previously, most self-employed individuals filed one annual tax return. Conversely, MTD requires quarterly updates throughout the year. Accordingly, you'll submit information four times annually, followed by a final year-end declaration.

Additionally, paper records become obsolete under these new rules. Instead, you must use MTD-compatible software to record all income and expenses digitally. Eventually, traditional self-assessment returns will disappear entirely, replaced by this quarterly system.

Currently, limited companies don't fall under MTD requirements for corporation tax. Therefore, some business owners consider incorporating to delay compliance. However, we strongly advise against making decisions purely for tax reasons.

Historically, incorporation provided significant tax savings. Nevertheless, these benefits have diminished over recent years. Generally, the tipping point for incorporation sits around £25,000 annual profit. Below this threshold, the tax advantages often prove marginal.

Furthermore, becoming a limited company brings additional responsibilities:

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• Companies House registration and annual filings
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• Payroll system operation
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• Both personal and corporate tax obligations
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• Higher accounting fees
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• Stricter penalty regimes
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Undoubtedly, MTD increases administrative burdens for self-employed individuals. Quarterly reporting means more frequent deadlines and ongoing software costs. However, embracing digital accounting tools can streamline this process significantly.

Alternatively, limited companies face different administrative challenges. Specifically, they must manage payroll obligations, national insurance contributions, and potentially VAT compliance. Additionally, the rules around mixed personal and business expenses change when you incorporate.

Obviously, there's no one-size-fits-all solution to this challenge. Rather, your decision should align with your business goals and circumstances. Particularly important is considering your long-term strategy, not just immediate tax implications.

Certainly, professional advice proves invaluable when navigating these choices. Whether you choose to remain self-employed or...