Evidence required for employment expenses after rise in ineligible claims

The tax authority wants to make sure that taxpayers get the tax relief they are entitled to in as straightforward a way as possible. However, it says it also needs to make sure that it can identify where taxpayers are not eligible and prevent them receiving payments they are not entitled to.

That’s why HMRC is implementing new evidence requirements for claimants, to respond to the tax risk from ineligible employment expense claims.

Checking evidence

On 10 June, HMRC suspended processing some claims for tax relief on employment expenses while they considered the best way to manage this risk. In response, it has decided that it will be changing the PAYE employment expense process for taxpayers.

From 14 October 2024, HMRC will require taxpayers who want to claim PAYE employment expenses to use a P87 form and provide supporting evidence to prove their eligibility before it can progress the claim.

When taxpayers send the evidence for P87 work expense claims, HMRC will check all evidence and confirm to taxpayers whether they are entitled to tax relief.

HMRC has also begun compliance projects looking at employment expenses submitted via self assessment returns. In these projects the tax authority will carry out checks on the eligibility of claims, asking for further evidence.