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A Guide to Filling Out P87 Form for Work Expenses Tax Relief

Published by UK Property Accountants
Published Date: April 10, 2024
Categories: P87 Form, Tax Relief

A P87 Form is a document to claim tax relief for work-related expenses. It is used by employees under PAYE who don't have to file self-assessment tax returns. If you are required to complete a self-assessment tax return, you should not complete the P87 Form and should claim these reliefs via a self-assessment tax return. 

In this article, we'll walk you through completing the P87 Form, ensuring you get all the potential tax refunds. 

Understanding P87 

As previously mentioned, P87 Form is a mechanism to claim relief to expenses incurred for work by employees. If you've spent money on work-related expenses that your employer hasn't reimbursed you for, you might be eligible for tax relief on these costs. However, if your expenses total more than £2,500, you'll need to claim them through a self-assessment tax return.

For instance, let's say you bought equipment specifically for work and didn't get reimbursed by your employer. You can potentially receive a tax refund of 20% of these expenses by completing and submitting a P87 Form.

You can claim expenses for up to four years using P87 Form. The form includes sections where you'll need to provide personal details, details of the expenses you're claiming, and information about how you'd like any repayment to be made. In the subsequent sections, we will explore these areas in detail.

Guidelines

To avoid delays in processing the form, you must complete every box in P87 Form that is appropriate to you. The P87 Form must be signed and dated. Forms received without completing mandatory information are rejected, so it is necessary to fill in these details. Required fields in the form are indicated with a "*" sign. So, you need to make sure that you fill in these details. You must provide employment and personal information by filling out the form. Ensure you sign the P87 Form. An unsigned form may lead to rejection. You need to ensure that the information you provide is correct, as providing false information could lead you to prosecution. 

Section 1: Personal Details 

You are required to fill in your details in this section. You will need to provide information regarding:  

Filling Out Form P87

Section 2: Employment Details  

You are required to provide your employment details by filling out the form. The information you are required to provide is listed below: 

  • Employer PAYE reference
  • Job title
  • Employer name
  • The first line of the employer's address 
  • Employer postcode
  • Type of industry (only needed for claiming flat rate expenses)
  • Employee number

Ready to master UK payroll taxes and deductions? Read our article on "A Complete Guide to UK Payroll Taxes and Deductions for Employers" to simplify your payroll process.

Section 3: Flat Rate Expenses 

To claim flat rate expenses, you need to fill out this section of P87 Form. A flat rate expense is a set amount of money an employee can claim for costs incurred. Flat rate expenses apply to those who work in trade and other industries with set standards and job-related essential expenditures. In some cases, trade unions have agreed with tax authorities on an amount to cover the annual job-related expenses. You can claim a flat rate relief without needing a record and receipt. 

Section 4: Professional Fees and Subscription 

You can claim tax relief on professional membership fees necessary for your job. Similarly, relief can be sought for annual subscription fees to approved professional bodies or learned societies if being a member of that body is relevant to your job. 

Section 4 of P87 Form looks like this: 

Professional fees and subscription

Section 5: Business Travel Costs 

If you use your car, van, motorcycle, or cycle for business mileage, you can claim tax relief as a mileage claim. It's essential to note that travel between your home and your permanent workplace is not eligible for claims. Mileage claims are calculated by multiplying your business-related mileage with the applicable HMRC mileage rate throughout the tax year. 

Vehicles

Mileage rate

Cars and Vans (First 10,000 miles)

45p

Cars and Vans (After 10,001 miles)

25p

Motorcycles

24p

Bicycles

20p

For instance, if you've driven 13,000 business miles in your car during the tax year, you can claim £5,250, illustrated as follows: 

10,000 * 45p= £4,500 

3,000 * 25p= £750 

Mileage Allowance Relief Calculator

Try out our exclusive Mileage Allowance Relief Calculator. Easily calculate your mileage and get the Maximum Tax Deduction possible.

Section 6: Hotel and Meal Expenses  

While accommodation, meals, and business phone calls during business trips can be allowable, it excludes expenses like newspapers, bar bills, personal phone calls, and laundry. Records and receipts are necessary for these claims. 

Section 7: Expenses Incurred Working from Home 

If your job requires you to live far from the office or your employer lacks a physical office, you can claim tax relief for working from home. This relief covers business phone calls and your work area's additional gas and electricity costs. 

You can either claim tax relief: 

  • Of 6 days a week (no evidence required) or 
  • The exact amount of extra cost you have incurred above the weekly amount (evidence is required)  

Section 8: Expenses Reimbursed by Employer 

If your employer has reimbursed any expenses, enter the type of expense received and amounts paid to you in section 8 of P87 Form. You will need to deduct these amounts while claiming tax relief. If you didn't receive a mileage allowance, you must attach the mileage logs to your claim when you submit it. 

Unlock the secrets of "Taxable benefits with P11D and P11D(b) forms". Read now to stay compliant!"

Paperwork Requirements 

You must only send paperwork if you claim fuel cost or mileage allowance. You are advised to keep an extra copy of the form to yourself. 

Getting a Refund 

Not everyone gets a refund, but if you are owed a refund, you can claim it by yourself, or a nominee can claim it on your behalf. If you're eligible for repayment, HMRC will send you a cheque. You can opt for direct delivery to your home address or a nominee's address. 

Conclusion 

Completing a P87 Form is a crucial step to reclaim your expenses. Accuracy and completeness enhance your chances of securing the tax refunds you deserve. Keeping records and receipts of costs can be vital for maximising claims. This may be a slight reduction on your taxes, but why waste hard-earned money paying taxes when you can reclaim it? 

Ready to Claim Tax Relief with P87 Form?

Contact us today for efficient and hassle-free assistance.

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