Flat rate expenses make it easier for people to submit tax relief claims for a set amount of work-related purchases each year. Unfortunately, the term can be a little confusing as it is relevant to a few different schemes. There are two types of flat rate expense schemes in effect:
Flat rate expenses for employees Simplified expenses for self-employed people Employee flat rate expenses As an employee, flat rate expenses are designed to provide tax relief for a set amount of money without you having to provide receipts or track purchases. Depending on your job and industry, you’ll be eligible for a fixed flat rate which is written off against your overall tax bill. Common purchases covered by flat rate expenses include:
Travel Tools Clothing Subscriptions and professional fees Working from home (£6 per week where eligible) Self-employed people can instead use simplified expenses to apply a ‘flat rate’ to costs associated with running a business vehicle, living at business premises or working from home.
Rather than leaving you confused on the topic of flat rate expenses vs simplified expenses, we’re clearing everything up with this handy guide. We’ll start with a guide for employees and then discuss self-employment – so if you’re a sole trader, click here to jump to that section.
Criteria for eligibility To be able to claim for flat rate expenses, you need to:
Be an employee in a field which generally requires work-related expenses such as tool repairs, uniform purchases etc. Have paid income tax during each year you claim for. Only claim for a period no longer than four years. Check to ensure you don’t already have flat expenses included in your tax code. What if your employer pays you back for expenses? In some businesses, expenses are already covered by an in-house scheme. In these systems, employees can provide receipts for work-related costs to be repaid in their next salary payment. In these cases, you can’t claim for flat rate expenses – HMRC assumes your employer already covers your costs. Flat rate expenses are solely for employees who have to buy things for work but don’t get repaid for them.
Types of flat rate expenses and their worth Flat rate expenses are designed around specific industries, usually as a result of trade union negotiations. Expenses are awarded based on agreed amounts for each job title. Some job titles are not covered in the HMRC table but may still be included – so it’s always worth finding the most relevant industry and job title to see how much you can claim.
Click here to jump down to the table , which we’ve included at the end of this article due to its length.
If you’re wondering what a flat rate expense is worth, the average amount you can claim for varies between £60-140. Some outliers exist, such as a flat rate expense of £1022 for pilots, co-pilots and uniformed flight deck crew and £720 for cabin crew.
A full list of qualifying professions and the costs you can claim for is available via the government’s website . Flat rate expenses don’t cover all work costs, and some professions are able to claim for additional tax relief for purchases such as:
Tools and equipment bought for work, provided you have receipts Costs for travel associated with work Union memberships and professional subscription fees If you’re unsure whether you can claim for flat rate expenses or other costs, our team would be more than happy to talk through your options. Get in touch today to learn more.
How to claim flat rate expenses If you’re not used to doing your own tax returns, you may be intimidated by the idea of submitting your own claim for flat rate expenses. Don’t worry – the process is straightforward and depends on whether your employer has already accommodated for flat rate expenses.
If they have, you’ll see a change in tax code which will automatically apply the tax relief each year. If they haven’t, speak to your accounting department and ask why. Alternatively, you can apply for a tax rebate to cover any period over the last four years.
Simplified expenses for self-employed people If you’re self-employed, you might also encounter the term ‘flat rate expenses’ as part of a wider concept called simplified expenses. These are designed to make it easier for self-employed people to complete tax returns without having to track each expense and, like the system for employees, apply a ‘flat rate’ for certain expenses.
Simplified expenses can only be used by sole traders or business partnerships with no companies as partners. They are only applicable to three specific costs and carry defined flat rates:
Cost type Reporting metric Flat rate
Driving a business vehicle
Business miles per year
Cars and vans: 45p per mile for 10,000 miles and 25p per mile after 10,000.
Motorcycles: 24p per mile
*Eligible employees can also claim these costs
Working from home
Hours spent WfH per month
25-50 hours p/m: £10 per month
51-100 hours p/m: £18
101+ hours p/m: £26
Living at your business premises
How many people live at the premises each year
1 person living in property: £350 per month
2 people: £500
3+ people: £650
For all other claimable costs, you’ll need to follow the standard tax reporting system. In some cases, simplified expenses may not be beneficial and might mean you lose out on a significant amount of tax relief – so it’s up to you to work out whether the simplicity is worth the difference in tax relief. Use this government calculator to help give you an idea, or contact the team here at Crunch for a more detailed look at your business’s tax situation.
A note on working from home and flat rate expenses Employees who work from home can’t use flat rates and instead must demonstrate compliance with fairly strict criteria outlined here to be able to claim any costs. For self-employed people, claims are easier due to simplified expenses, which provide a flat rate for WfH. This massively reduces the administrative burden of working out how much of your home expenditure is related to business.
To be eligible for flat rates, you need to work at least 25 hours per week from home. These rates can’t be used against phone or internet bills, which require manual calculations and inclusion in your tax return.
If you’re self-employed and working from home, simplified expenses are just one aspect of the potential tax relief you’re entitled to. Read our self-employed working from home tax guide to learn more.
Flat rate expenses: tips and best practices As an employee, flat rate expenses are just one type of expense you can claim. Other costs, such as business mileage incurred in your personal vehicle etc may all be claimable too. Don’t forget that you have four years to apply for flat rate tax relief, so make sure you are claiming for any period in which you’ve been eligible. Remember that some occupations and industries have different reliefs applied to different tax brackets. Higher-rate taxpayers can claim higher amounts of relief. If you’re a sole trader pressed for time, quickly check which costs you can claim for with this Crunch article If you’re still confused by any of the flat rates covered in this guide, we can help. Crunch provides accountancy and tax reporting tools for small businesses to help streamline your requirements and, just as the flat rate concept intends, make your life easier. Click here to learn more.
Flat Rate Expense Amount Table
Industry
Job
Flat rate expense amount £
Agriculture
all workers
100
Airlines
pilots, co-pilots, helicopter pilots and uniformed flight deck crew
1,022
Airlines
cabin crew — stewards and stewardesses
720
Aluminium
a. continual casting operators, process operators, de-dimplers, driers, drill punchers, dross unloaders, firemen (engaged to light and maintain furnaces), furnace operators and their helpers, leaders, mould-men, pourers, remelt department labourers and roll flatteners
140
Aluminium
b. cable hands, case makers, labourers, mates, truck drivers and measurers and storekeepers
80
Aluminium
c. apprentices
60
Aluminium
d. all other workers
120
Armed forces
all ranks in the Royal Air Force, Royal Marines and the army
100
Armed forces
Royal Navy
80
Banks and building societies
uniformed doormen and messengers
60
Brass and copper
braziers, coppersmiths, finishers, fitters, moulders, turners and all other workers
120
Building
a. joiners and carpenters
140
Building
b. cement works, roofing felt and asphalt labourers
80
Building
c. labourers and navvies
60
Building
d. all other workers
120
Building materials
a. stone masons
120
Building materials
b. tilemakers and labourers
60
Building materials
c. all other worker
80
Clothing
a. lacemakers, hosiery bleachers, dyers, scourers and knitters, knitwear bleachers and dyers
60
Clothing
b. all other workers
60
Constructional engineering (includes buildings, shipyards, bridges and roads)
a. blacksmiths and their strikers, burners, caulkers, chippers, drillers, erectors, fitters, holders up, markers off, platers, riggers, riveters, rivet heaters, scaffolders, sheeters, template workers, turners and welders
140
Constructional engineering (includes buildings, shipyards, bridges and roads)
b. banksmen, labourers, shop-helpers, slewers and straighteners
80
Constructional engineering (includes buildings, shipyards, bridges and roads)
c. apprentices and storekeepers
60
Constructional engineering (includes buildings, shipyards, bridges and roads)
d. all other workers
100
Electrical and electricity supply
a. workers incurring laundry costs only
60
Electrical and electricity supply
b. all other workers
120
Trades ancillary to engineering
a. pattern makers
140
Trades ancillary to engineering
b. labourers, supervisory and unskilled workers
80
Trades ancillary to engineering
c. apprentices and storekeepers
60
Trades ancillary to engineering
d. motor mechanics in garage repair shop
120
Trades ancillary to engineering
e. all other workers
120
Fire service
uniformed fire fighters and fire officers
80
Food
all workers
60
Forestry
all workers
100
Glass
all workers
80
Health and care staff employed by the National Health Service, private hospitals, local authorities and independent care providers
a. ambulance staff on active service
185
Health and care staff employed by the National Health Service, private hospitals, local authorities and independent care providers
b. nurses, midwives, chiropodists, dental nurses, occupational, speech, physiotherapists and other therapists, healthcare assistants, domiciliary care workers, phlebotomists and radiographers
125
Health and care staff employed by the National Health Service, private hospitals, local authorities and independent care providers
c. plaster room orderlies, hospital porters, ward clerks, sterile supply workers, hospital domestics and hospital catering staff
125
Health and care staff employed by the National Health Service, private hospitals, local authorities and independent care providers
d. laboratory staff, pharmacists and pharmacy assistants
80
Health and care staff employed by the National Health Service, private hospitals, local authorities and independent care providers
e. uniformed ancillary staff — maintenance workers, grounds staff, drivers, parking attendants and security guards, receptionists and other uniformed staff
80
Heating
a. pipe fitters and plumbers
120
Heating
b. coverers, laggers, domestic glaziers, heating engineers and all their mates
120
Heating
c. all gas workers and all other workers
100
Iron mining
a. fillers, miners and underground workers
120
Iron mining
b. all other workers
100
Iron and steel
a. day labourers, general labourers, stockmen, timekeepers, warehouse staff and weighmen
80
Iron and steel
b. apprentices
60
Iron and steel
c. all other workers
120
Leather and tanning
a. footwear and leather goods operatives
60
Leather and tanning
b. all other workers
80
Metal manufacturing
a. copper manufacturers
120
Metal manufacturing
b. all other workers
100
Motor trade
a. motor mechanics
140
Motor trade
b. all other workers
100
Navy
a. sailors and ratings
80
Navy
b. apprentices
60
Navy
c. all other workers
80
Newspapers and printing
a. compositors and linotype operators
60
Newspapers and printing
b. machine minders, stereotypers, plate layers, stonemen, lino type minders and their minders, leadsmen, storemen and warehousemen, mailers up and packers up
60
Newspapers and printing
c. all other workers
60
Industry
Job
Flat rate expense amount £
Paper
a. all workers
60
Paper
b. apprentices
60
Paper
c. all other workers
60
Photography
a. studio operators, laboratory workers and retouchers
60
Photography
b. all other workers
60
Plastics
all workers
80
Police
a. uniformed police officers up to and including the rank of chief inspector
140
Police
b. constables and sergeants
100
Police
c. civilian employees, including police staff, fingerprint officers and scenes of crime officers
80
Police
d. control room staff
60
Police
e. traffic wardens and parking attendants
60
Post office
a. postmen and women, mail sorters, counter clerks and telegraph messengers
60
Post office
b. engineers, telegraph and telephone workers, stores and laboratory staff
80
Printing
all workers
60
Public transport (including buses, trains, trams and London Underground)
a. drivers and conductors
60
Public transport (including buses, trains, trams and London Underground)
b. all other workers
80
Railways
a. guards, shunters, signalmen, drivers, firemen and their mates
80
Railways
b. porters, railway shop staff, ticket collectors, booking clerks, station staff and platform attendants
60
Railways
c. all other workers
80
Scientific research and development
a. research workers, physicists, chemists, geologists, biologists, geographers, surveyors and their assistants, laboratory technicians and their assistants
80
Scientific research and development
b. all other workers
60
Security
a. uniformed security officers
60
Security
b. all other workers
80
Shipbuilding
a. shipwrights, platers, caulkers, burners, riveters, riggers, shore workers, ship repairers and shipbreakers
120
Shipbuilding
b. shipbuilders’ labourers and all other workers
100
Shoemaking
a. lasters, finishers and closers
60
Shoemaking
b. all other workers
80
Textile manufacturing
a. cotton manufacturing operatives, weavers, bleachers, dyers and printers
80
Textile manufacturing
b. wool and worsted manufacturing operatives
60
Textile manufacturing
c. flax, hemp and jute manufacturing operatives
60
Textile manufacturing
d. silk manufacturing operatives
60
Textile manufacturing
e. lace manufacturing operatives
60
Textile manufacturing
f. all other workers
60
Timber and woodworking
a. sawmill workers, veneer and plywood operatives, carpenters and joiners
60
Timber and woodworking
b. all other workers
80
Transport (air)
a. aircrew, cabin staff, ground staff
60
Transport (air)
b. all other workers
80
Transport (sea)
a. merchant seamen
80
Transport (sea)
b. dock and harbour workers
60
Transport (sea)
c. all other workers
80
Transport (road and haulage)
a. lorry drivers, chauffeurs, van drivers, bus drivers, motorcycle couriers
60
Transport (road and haulage)
b. all other workers
80
Waste disposal
a. refuse collectors
60
Waste disposal
b. all other workers
80
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