Claiming Job Expenses Tax Relief

Dudely

Hi there, was wondering if anyone could shed some light on my situation.

I bought a specific piece of equipment (>£2k) with my own money when I was in university (2019) to use it long-term for my career. I wasn't working when I bought the equipment so I didn't pay any tax back then. However, I have since graduated in 2020, started working and paying tax. I am still using the same equipment for work till today. I tried to claim a tax relief as job expenses, but it got rejected and I got a letter asking for further information. The letter stated that

'You must have paid tax in the year you spent money on the expenses you're claiming. How much you can claim depends on the rate you pay tax".

I tried to search on hmrc website about tax relief and it says 'You must have paid tax in the year. You’ll get tax relief based on what you’ve spent and the rate at which you pay tax'

For the equipment that I bought in 2019, is it possible to claim it for under current tax year? Any advice is greatly appreciated

Jeremy535897

The basic rule for employees is in section 336 ITEPA 2003:

"336 Deductions for expenses: the general rule

(1)The general rule is that a deduction from earnings is allowed for an amount if—

(a)the employee is obliged to incur and pay it as holder of the employment, and

(b)the amount is incurred wholly, exclusively and necessarily in the performance of the duties of the employment."

It is impossible to meet this test if the expenditure pre-dated the employment.

If the items qualify for capital allowances, the test is slightly different. See:

https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim36540 et seq

It is very difficult to show that the expenditure is on "need to have" rather than "nice to have" assets, particularly if you already own the assets before the employment commenced.