Tax reliefs
Tax reliefs are amounts that are deducted from taxable income in recognition of money that is needed to be spent by the taxpayer in working. They can be claimed in addition to a personal allowance and can be backdated for up to six years. Tax reliefs for self-employed people should be calculated by a specialist adviser.
For employed people, it is possible to claim relief on any money that is spent to enable a job to be done, but which is not paid for by the employer. The expenses have to be ‘wholly, exclusively and necessarily’ incurred in order to do the work.
Items for which tax relief can be claimed include:
•membership of professional bodies;
•special clothing for work;
•using heating/lighting or the telephone at home for work;
•buying tools.
Another form of tax relief is the ‘rent-a-room’ scheme. This enables someone to let out a main room in their home and not pay tax on the rental income, provided the rent stays below a certain level. Even if the client cannot benefit from this scheme, there are other forms of tax relief that may be applicable if they let out property. Specialist advice should be obtained.