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How to claim expenses at work without breaking the rules

Woman in coffee shop paying for a cup of coffee and cake with her mobile phone. claiming expenses
Before claiming expenses, you need to know the rules. You may find that buying a coffee at the station before your journey might not be covered, but a coffee on the train is. (Tara Moore via Getty Images)

Last week marked the 15-year anniversary of the breaking of the MP’s expenses scandal, which alerted us all to the fact that our taxes had somehow been spent on moat clearing and a duck house.

We were gripped for weeks by expenses that had been claimed for everything from a toilet seat and a trouser press to a packet of Hobnobs. Since then, the system has been reformed and the issue of expenses dropped out of sight.

It’s something millions of people barely think about, except when they’re arm-wrestling with the finance department at work over the cost of a sandwich — or staring at an enormous pile of receipts as they brace themselves for a tax return.

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However, it’s worth spending some time getting your head around the rules, because a better knowledge of how they work can save you money.

If you’re employed and claiming expenses, you need to know the rules before you spend a penny. You may find, for example, that buying a coffee at the station before you start your journey might not be covered, but a coffee in the train is.

Read more: How to make a tax-free income

Likewise, there may be limits on what you can spend on things like meals, travel or overnight stays. Compromising on a cheaper hotel and having it all refunded is a far better option than staying where you like and discovering you’ll never see that money again.

If you work for yourself, HMRC sets the rules, so it’s worth exploring some of the most common ones.

You can claim the costs of running the office — like stationery and software — as well as utilities.

If you only use your car for work, don’t stint on what you claim for — this should include the insurance, breakdown cover, repairs, servicing and parking — as well as petrol. However, you can’t claim for any speeding or parking fines.

If you work from home or use the car for leisure as well as work, then don’t try to claim all of these costs — you need a reasonable method for dividing them. If this feels like a faff too far, you can use flat rates for both instead.

You can also claim membership of professional bodies, and any publications that relate to your work. Unfortunately, the HMRC website stipulates that this doesn’t include gym membership — so if you were considering this, bear in mind that many people have tried and failed to do this before you.

Read more: Who is the breadwinner in your family and does it matter for your finances?

You can’t claim for entertaining clients either. This is a common misconception, but if you treat your clients, then you’ll be footing the bill yourself.

Even if you don’t work for yourself, you can claim for the cost of any clothes you have to wear for work — like uniforms, protective equipment, or costumes. You can also claim the tax back on maintaining the uniform. There’s a flat rate, so you don’t need to prove the cost.

Unfortunately, a suit for work doesn’t count — again so many people have tried and failed here that HMRC spells it out.

It’s worth highlighting that you can claim directly on the gov.uk website. There are claims firms who offer to do this for you, but they’ll charge a hefty fee, and it’s not worth it.

Claiming expenses is never anyone’s favourite job. However, if you know the rules, you may be able to get money back for things you hadn’t considered, and save the drama of trying to claim for something that raises an issue later.

You might not be submitting a claim for a duck house or moat clearance, but we know from the expenses scandal that even a packet of Hobnobs can sometimes get you into trouble.

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