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HMRC internal manual

Employment Income Manual

Deductions: expenses other than travel: expenses from F to Z

Sections 336 and 367 ITEPA 2003

Many workers are obliged to spend small amounts each year in maintaining or renewing tools and special clothing 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 employees in specified occupations. Flat rate deductions are only permitted where an expense is necessarily incurred by the employee.

Flat rate expense deductions are given by section 367 ITEPA 2003. There is a table of amounts agreed for the tax year 2008 to 2009 onwards.

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. This is illustrated by example EIM32735.

For advice on the flat rate expense negotiated separately for:

  • nurses and other health care workers, see EIM67210 and EIM66790
  • airline pilots, see EIM50050 onwards.

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.

This flowchart sets out the steps to follow to determine the amount of any flat rate deduction.