HMRC Tax Claim Legislation

gov legislationHMRC make the rules complex and indeed their staff often refer to their EIM manual, made up of small sections and examples that then point to a further rules and examples until you come back full circle usually pretty dizzy! 

EIM31630 - The general rule for employees’ expenses is a good example of the rules and legislation we refer to, along with the actual act of law that the manual is based on. It refers to 11 other EIMs!

There is nothing new with this legislation, the Act has been around since 2003. This legislation is mainly directed at the PAYE worker. If anything it is entirely outdated and does not reflect how our transient workforce and employers operates today. HMRC wrongly assume that employers reimburse for all "out of pocket" expenses and that they pay for the training of their staff. Unless you're lucky enough to work for the large corporations, chances are you will have some expenses that are not reimbursed.

It is our job to understand the legislation - it is part of what our fee is for. The legislation and rules can be found here but for ease it says:


336 - Deductions for expenses: the general rule

(1)The general rule is that a deduction from earnings is allowed for an amount if—

(a)the employee is obliged to incur and pay it as holder of the employment, and

(b)the amount is incurred wholly, exclusively and necessarily in the performance of the duties of the employment.

(2)The following provisions of this Chapter contain additional rules allowing deductions for particular kinds of expenses and rules preventing particular kinds of deductions.

(3)No deduction is allowed under this section for an amount that is deductible under sections 337 to 342 (travel expenses).

Got that?

We often see people describing what we and other companies do when claiming tax back for clients as a scam.

In creating this page we can illustrate that it is not illegal to claim back work related expenses and here is the HMRC legislation to prove it.

Not only that, in 2013 Bettertax voluntarily underwent a rigorous compliance process by senior HMRC inspectors, to ensure that our procedures came up to their very strict rules. We can assure you - they did! Unfortunately there are fraudulent tax agents which is why you should be careful about who you choose to work with on your tax return.



If you require any further information or advice regarding record keeping & your responsibilities, just give us a call on 01280 821020 or talk to us on Facebook or Twitter




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