EIM32700 - Other expenses: flat rate expenses
Sections 336 and 367 ITEPA 2003
Many workers are obliged to spend small amounts each year in
maintaining or renewing tools and special clothing (as defined by
EIM32465) that are necessary to carry
out the duties of their employment.
To deal with individual deduction computations for each such
employee would be cumbersome and time consuming for taxpayers and
for HMRC. So flat rate deductions have been negotiated on a
national basis with trade unions. These flat rate deductions apply
to the employees in specified occupations listed at
EIM32712. Flat rate deductions are only
permitted where an expense is necessarily incurred by the employee,
see
EIM32710.
Flat-rate expense deductions are given by Section 367 ITEPA
2003, the terms of which are explained at
EIM32705. There is a table of amounts
agreed for 2004/05 onwards at
EIM32712. From April 2005, details of
amounts agreed for 2003/04 and earlier can be found in the Coding
business area of the PAYE Manual. They were previously at EP2260.
An employee does not have to be a member of the relevant
trade union for the deduction to be given.
The deductions are intended to cover the average expenditure
that would be deductible under Section 336 ITEPA 2003. But there is
nothing to prevent an employee asking for a deduction in any year
for the
actual expense he or she has incurred, see
EIM32715. This is illustrated by example
EIM32735.
For advice on the flat rate expense negotiated separately
for:
For the amount that may be deducted for laundry costs for
employees not covered by a flat rate expense deduction, see
EIM32485.
In some cases you may wish to consider introducing a locally
agreed deduction. If so, see
EIM32725.
The flowchart at
EIM32730a sets out the steps to be
followed to determine the amount of any flat rate deduction.
