|
This information applies to England, Wales, Scotland and Northern Ireland
What are tax reliefs
As a taxpayer, if you spend money on certain outgoings, the amount you spend can be deducted from your total income and you will therefore pay less tax. Tax reliefs can be claimed in addition to any personal tax allowances that you are entitled to and can be backdated for up to six years.
Some reliefs have to be claimed by writing to your tax office, although most are automatic. No action need be taken by you to claim automatic reliefs.
Types of tax relief
There are six main types of tax relief:-
- tax reliefs available to self-employed people
Information about tax-reliefs for self-employed people should be obtained from an experienced adviser, for example, a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.
Back to top
Tax reliefs for employees
As an employee, it is difficult for you to get tax relief on any item connected with your work. This is because you have to convince HM Revenue and Customs that no one else could do the work without spending that money. Also, in practice, many employers pay these expenses rather than expect you to pay them.
The only expenses which can be claimed as reliefs against tax are those incurred ‘wholly, exclusively and necessarily’ in order to do the work, and for travelling to do the work. Few expenses fulfil this strict rule.
Tax reliefs that can be claimed in connection with employment include:-
- expenses for maintaining or replacing tools or special working clothes, such as overalls used at work, which are not paid for by the employer
- travel expenses necessary for you to carry out your work and for which the employer does not pay. Note that travelling expenses from home to work and vice versa are not allowed since they are not incurred as part of the work
- fees and subscriptions to professional bodies which are either necessary for you to carry out your work or relevant to your job, and which are not paid by the employer
- interest on loans that you use to buy equipment (such as machinery) necessary to do your job. This is allowed for the tax year the equipment is purchased and the following three tax years
- contributions to occupational pension schemes. If you are not in any occupational pension scheme, you are entitled to tax relief on the premiums you pay to provide for your personal pension
- charitable donations up to a certain limit per year under the payroll giving scheme (see under heading Tax relief on payments to other people)
- a proportion of expenses for lighting, heating and phone calls if you must do some work from home. This should be negotiated with the tax office.
For more information on any of the above you should consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.
Back to top
Tax relief for training
You will not be taxed on the amount your employer pays or reimburses you for work-related training.
For more information about tax relief on training, you should consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.
Back to top
Tax relief on 'rent a room' property
A ‘rent a room’ tax relief is available for owner occupiers and tenants who let furnished rooms in their homes. Under this scheme, no tax is payable on rent received provided the rent does not exceed a certain level per tax year.
If the 'rent a room' scheme does not apply, tax relief can still be claimed, but under a different system. Expenses for maintaining a property which is let out can be claimed as relief against tax.
If you want more information, you should consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.
Back to top
Tax relief on life insurance
Tax relief is only available on life insurance where the insurance was taken out on or before 13 March 1984.
Back to top
Tax relief on payments to other people
Tax relief on maintenance and child support
If you are making the maintenance/child support payments
You are not allowed tax relief on voluntary payments you make to a child, former spouse or former civil partner.
You may be allowed some tax relief on payments which you are making if:
- the payments can be enforced through the courts; and
- one or both of the spouses or civil partners was born before 6 April 1935.
If you are receiving maintenance/child support payments
If you receive maintenance or child support payments, you don't have to pay tax on payments received on or after 6 April 2000.
If you want more information, you should consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.
Payments to charities/deeds of covenant
Payments, up to a certain limit, made direct to a charity from an employee’s pay under the payroll giving scheme or payments to charities through the Gift Aid scheme are allowed as reliefs against tax.
Payments under deeds of covenant to charities are allowed as tax reliefs.
If you want more information, you should consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.
Back to top
|
