PLEASE NOTE: The charity TaxAid advises only those people on low incomes whose problems cannot be resolved with HMRC.

Standard allowances and rules

Employee expenses

Agreed standard allowances for employees

In many trades there are standard amounts agreed with HMRC to cover expenses for clothing and tools. These are called ‘flat rate’ deductions. Flat rate deductions avoid the need to keep receipts for expenses or to make detailed claims.

An allowance for these expenses is made by increasing your tax-free pay. This means that your PAYE code number will change. The number part of the code should increase by the ‘flat rate’ amount. To get your flat rate deduction, contact your tax office and explain why you think you are entitled.

More information on flat rate deductions can be found on the HMRC website at

http://www.hmrc.gov.uk/manuals/eimanual/EIM32712.htm and EIM32700, see http://www.hmrc.gov.uk/manuals/eimanual/EIM32700.htm

Rules for expenses for specific costs and occupations

Detailed guidance on expenses for specific occupations can be found on the HM Revenue and Customs website at http://www.hmrc.gov.uk/manuals/eimanual/EIM31623.htm.