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HMRC internal manual

Employment Income Manual

The general rule for employees' expenses: dealing with expenses: when to permit a deduction


If an employee considers that an expense is deductible it should be entered on his or her SA Return in the appropriate boxes on the employment pages. As regards the timing of the deduction, see EIM42430.

If the employee has not received an SA Return he or she can request a deduction for expenses by giving details in a letter or statement. Otherwise form P87 can be used, see EP2233.

The frequency and depth of your examination of any request for a deduction for expenses will depend on the circumstances of the case. You should not spend undue time on cases where the tax at stake is small, see EP3262.

However, there is a danger in these cases that a deduction incorrectly given could lead to a request for a similar deduction by hundreds or even thousands of other employees. So although the tax at stake in the individual case may be small the tax put at risk by an incorrect decision may be very large. In any case which may affect a large number of taxpayers it is vital to ascertain all the facts and apply the correct principles. There is guidance on dealing with cases that may affect large numbers of employees at EP3250.

In many cases there is specific guidance in this manual that you should follow. EIM31622 explains how to find the guidance you need.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)