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HMRC internal manual

Employment Income Manual

The general rule for employees’ expenses: dealing with expenses: always give an explanation if you refuse to permit a deduction for an expense

Many requests for a deduction are made by letter or by using form P87 by employees whohave not received an SA return, see EIM31700. Most of thesecases can be settled by agreement without using the formal machinery for assessment andappeal.

If a deduction is not due it is usually enough to explain to the employee in a letter,by telephone or at a meeting that a deduction cannot be given. But you must always give areasoned and complete explanation why this is so. Simply saying that a deduction is notallowable will not satisfy the employee and is likely to lead to further correspondence.

Frequently the employee will be convinced that the expenditure that he or she has incurredis both reasonable and necessary. You will need to explain carefully why that is notenough to permit a deduction.