You need to fill in a P87 form if you wish to claim tax relief for expenses you have accrued through your employment. Eligible expenses include mileage and travel, work uniforms, and work related equipment such as tools.
This guide looks at how to use a P87 form for claiming a tax rebate for expenses of employment. We look at the process, what is involved and how to start your claim.
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What is a P87 Form?
A P87 form is for any employee who is entitled to claim tax relief on expenses they incurr in the course of their employment.
This is not to be confused with tax deductions claimed by self employed workers. They claim their expenses on their annual self assessment. The P87 form is for use by employed taxpayers who have allowable expenses for which they can claim.
You can use the P87 form if:-
- You have allowable tax relief expenses as part of your job(s).
- The expenses you are claiming are under the limit of £2,500.
- You are an employee (not self employed).
- You do not fill in an annual tax return.
You cannot use the P87 form if:-
- You are classed as self employed.
- You have completed your annual tax return.
- Your expenses come to more than the £2,500 limit.
- You have not paid any tax in that year.
- Your employer has already reimbursed you.
If your employer has made a partial reimbursem*nt of expenses then you can apply to make up the difference between what you’ve been paid and HMRC’s approved rates.
How to Get a P87 Form?
To get a P87 form, you need to first check your eligibility. Once you have done this, you can move forward and fill out a form online or by post.
You should ensure you’ve set up a Government Gateway account on the HMRC website.
Online
The easiest way to claim tax relief with a P87 form is to do it by completing the form online via the gov.uk website.
You have 4 years to make a claim. There are times, however, when it is not possible for individuals to claim online and they need to fill in a paper copy instead.
Find the online form on the UKGOV site.
By Post
If you prefer, you can fill out a form and submit it by post. You need to complete the P87 process by post if you need to claim for more than 5 jobs.
You also claim by post if you are filling out the claim on behalf of another person. If you wish to claim more than the flat rate, then you need to claim by post along with the relevant receipts.
You can download a form from HMRC here.
By Telephone
It is also possible to call through with your claim but only if you have claimed the same expense type previously.
Also, the amount you are claiming needs to be less than £1,000 or £2,500 if you’re claiming for subscriptions and professional fees.
You cannot use the telephone services if your claim includes working from home expenses.
Further details of HMRC phone services can be found here.
What Employment Expenses Are Eligible For Rebates?
There are strict criteria for what employment expenses you can claim tax rebates on.
It is essential to remember that only those in employment and who pay tax can use the P87. Those individuals who are self employed will do this using the self assessment process.
Let’s take a closer look at what exactly you can claim back using the P87.
Work Uniforms
Work uniform tax relief is there to support the upkeep and maintenance of a work uniform.
This includes those employees who are required to wear a specific uniform, including work PPE.
The HMRC allowance is provided to cover washing and overall maintenance. The amount of allowance payable depends upon the industry you work in.
Care workers and nurses can claim tax rebates on additional work related clothing items such as shoes, hosiery, and replacement of specialist clothing items.
Working From Home
You can claim working from home tax relief if you are required to work from home and incur costs for doing so.
This does not include those who work from home as the self employed. It is for employees who are required to work from home part time or full time. You can claim for things such as:
- Making calls.
- Utility costs such as gas and electricity.
It isn’t possible to claim your rent or mortgage. The amount you do receive for home expenses is covered by a flat rate. If you wish to claim a higher amount then you need to send evidence such as utility bills.
Work Related Mileage
One of the things you can claim for is your work related mileage. This includes using your own car anywhere that is a temporary work location.
It also covers the use of a company car if you pay for the fuel. Public transport is also included when you need to use it as part of your work.
You cannot claim for regular commuting costs.
Professional Fees & Subscriptions
There are some instances when tax relief can be claimed on some professional fees and subscriptions.
This includes things like paying into trade unions and professional organisations. There is a list of pre approved unions and other bodies – to be able to claim, yours must be on this list.
You also need to be able to prove you need this membership to fulfil your job role.
Tools & Equipment
Any tools or equipment you need to purchase as part of your employment can be claimed back on.
There are two ways of pursuing a tool tax rebate. One is to claim for the tax code allowance which is set out by the industry you belong to.
This means you do not need to keep receipts as proof of purchase. Or, you can opt to claim capital allowance which requires you to keep receipts. This route is often preferred as the amount you get in tax relief can be a great deal more than the flat rate offer.
How to Fill Out HMRC Form P87
You can fill out your HMRC Form P87 by post, via the telephone or online.
Your circ*mstances will determine which route you need to take. Generally speaking, if you need to show receipts and proof of purchases then this will be done on a paper form and posted.
When it comes to filling in the form, the information is the same for all the various ways of doing it.
You will need to know:-
- Your National Insurance number.
- Employer information such as PAYE and employer number.
- Any evidence you need to add to your claim.
- Any contributions your employer has made towards your expenses.
The information that needs to be added to the form includes:-
- Your details such as name, address and date of birth.
- Contact number
- National Insurance
- Year of the claim.
- Employer PAYE reference.
- Job title
- Employer’s details
- Type of industry
- Employee number
- A tick option for claiming the flat rates.
- All the expense options.
- Total to claim.
- How you wish to be paid.
- Declaration
How Much Tax Rebate?
How much of a tax rebate you receive will depend on many factors.
The biggest factor is how much tax you have paid in that tax year. It may be that your tax code needs to be adjusted, in which case your tax relief amount will reflect this.
When it is being claimed on a year already passed then you will receive the full amount.
What to Do If Your Expenses Are Over £2500
If your expenses are over £2500 then you will need to complete a self assessment.
When your expenses are over £2500 then HMRC will give you relief in your tax code, based on the current year and the next one. You will additionally need to fill in a tax return which HMRC will send you.
Evidence Required by HMRC
Depending on the claim you are pursuing, you may need to provide evidence. However, you do not have to submit evidence along with your claim on the P87 form.
It is a good idea to file away any proof of your eligibility. This can include proof of any subscriptions, purchases, utility bills and laundry services.
This way, if there is a problem with your claim and further evidence is required, you have it all to hand. Once your claim has gone through and you’ve received your rebate then you can get rid of such information.
Further Reading:
- P87 Form Tax Rebate Guide – UK Gov.
- Self Assessment Penalties.
