How to Complete the “Employment” Section

You need to fill in the Employment section if you were employed either full-time, part-time or on a casual basis. You also need to fill it out if you received income as a Company Director or held an office. You going to need to complete a separate employment section for each job, directorship or office you hold.

The first thing you’ll need to do is let HMRC about how much you have earned before any tax was deducted, confirm your employer’s name and any benefits you have received. All this information will be on your P45, P60 or P11d.

The areas highlighted in yellow below show where you can find your gross pay and tax deducted on your P45 or P60.

Remember:

  • You don’t need to include national insurance deductions, just income tax deducted;
  • If you were paid any tips or other payments that were not included in your P60 you’ll need to enter them in this section;
  • You’ll need to include taxable benefits paid to you by your employer, these will be on your P11d

What is a Close Company?

If you are the director of a Limited Company, then you’ll need to disclose whether it is a close company on your tax return. A Close Company for UK tax purposes is a Limited Company that has 5 or less participators or where all the participators are also directors. For most small limited companies, participator means shareholder.  But it can also apply if a Company has certain types of borrowing or creditors like debentures.

So if you are the sole Director and shareholder of your Limited Company, then you need to choose “yes”.

The rules around Close Companies can be complicated, so always consult a professional if you are unsure how to answer this question.

Claiming Tax Relief on Your Job Expenses

If you paid for certain business expenses as part of your job but were not reimbursed for them by your employer, then you may be able to claim tax relief on what you have paid in this part of your online tax return, if you haven’t claimed these with a P87 form. One of the most common expenses is working from home due to Coronavirus (COVID-19), but can also claim things like:

  • business travel including incidental meals, accommodation and mileage for using your own vehicle for work reasons;
  • flat rate deductions for expenses that cover the costs of maintaining or replacing tools, uniforms or special work clothes;
  • professional fees and subscriptions;
  • capital allowances for buying large items of equipment necessary to do your job (but not cars or vans).

To claim for any employment expenses or capital allowances for equipment used in your employment, please make sure you select ‘Yes’ from the drop-down menu otherwise, select ‘No’.

You can only deduct the costs you had to pay out in doing your job that meet the HMRC criteria. You cannot claim for personal expenses.

Business Travel and Subsistence Expenses

If you have paid for business travel and incidental costs you can claim this here.

Generally you can claim the cost of:

  • Travel but not your normal commute;
  • Related food costs, keep your claim reasonable;
  • Accommodation;
  • Mileage allowance to cover the cost of using your own car, motorcycle or bike (make sure you use the set rates below and keep a record of how you reached your claim);
  • Additional mileage if your employer pays you less than the HMRC set rates below;
  • Other expenses like using your phone calls.
 First 10,000 MilesOver 10,000 Miles
Cars and vans45p25p
Motor cycles24p24p
Bicycles20p20p

You’ll need to add up the amounts you have spent in respect of travel and subsistence, then include them in the first box.

Fixed Deductions for Expenses

HMRC allows you to claim tax relief if you are responsible for paying for cleaning, maintaining or replacing:

  • Specialist work clothes, like nurses uniforms, hard hats and safety boots;
  • Occupational uniforms if you are an NHS worker for example or a member of the police force;
  • Small tools like an electric drill.

You can only claim for the cost of replacing an item, not the initial cost of buying it.

You can either claim:

Professional fees and subscriptions

You can claim tax relief on professional fees and subscriptions for approved professional organisations only. Check if your professional fees or subscription meets the criteria for HMRC approval here.

If you choose to claim for expenses in this section, then you should be aware that HMRC may adjust your PAYE code.

Other expenses and capital allowances

You can include in this box any amounts you have paid for buying small items of equipment that you need to do your job, but your employer did not provide for you. So that’s things like electric drills or a mouse for your laptop.

You can claim for more expensive items, like a laptop, but you’ll need to claim tax relief using capital allowances. You cannot claim for cars or vans in this way.

Claiming expenses is strictly reviewed by HMRC and it is common to find mistakes on claims.

So if you are planning to claim tax relief on expenses make sure everything you have paid for is truly eligible, you have receipts where necessary and you do not claim for anything your employer has reimbursed you for.

How to Fill In Your Tax Return Online

Disclaimer
While I have made every attempt to ensure the accuracy of the contents of this guide, I cannot accept responsibility for any losses or penalties you may incur while following the contents. I have prepared the contents for a wider audience so you may need to seek additional assistance relevant to your own personal situation.

Anita Forrest
About Anita Forrest

Anita Forrest is a Chartered Accountant, spreadsheet geek, money nerd and creator of www.goselfemployed.co - the UK small business finance blog for the self-employed community. Here she shares simple, straight-forward guides to make self-employment topics like taxes, bookkeeping and banking easy to understand.