Fixed deductions for expenses

Produced by a Tolley Employment Tax expert
Employment Tax
Guidance

Fixed deductions for expenses

Produced by a Tolley Employment Tax expert
Employment Tax
Guidance
imgtext

Introduction

In certain circumstances, HMRC can agree an appropriate fixed rate amount (also called a flat rate expense) which can be deducted from earnings for tax purposes. These typically refer to certain classes of employees who are required to incur expenditure on things such as tools and clothing.

For example, firefighters are entitled to a flat-rate expense allowance on the costs of cleaning and maintaining their uniforms where laundry services are not provided by their employers.

These amounts should not be confused with round sum allowances (discussed in the Round sum allowances guidance note), which are generally treated as taxable income for the employee.

Fixed deductions do not include the approved mileage rate for business travel using the employee’s own car. This is treated as business travel, see the Fuel-related payments / mileage payments guidance note.

Fixed rate deductions

HMRC can agree fixed sum deductions that are negotiated with trade unions to apply to certain classes of employees. These are rates that employers may pay free of pay as you earn (PAYE) and reporting

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
Powered by Tolley+™
  • 27 Aug 2026 10:15

Popular Articles

Research and development expenditure credit (RDEC)

Research and development expenditure credit (RDEC)This guidance note provides information on how research and development expenditure credits (RDEC) are calculated and utilised. The Qualifying expenditure for R&D tax relief guidance note provides information on what expenditure qualifies for

14 Jul 2020 13:24 | Produced by Tolley in association with Will Sweeney Read more Read more

UK VAT invoice requirements

UK VAT invoice requirementsThis guidance note provides details of the information that must be shown on a valid tax invoice. Businesses supplying goods and services that are liable to the standard or reduced rate of VAT are required to issue a tax invoice to another VAT registered person.If the

14 Jul 2020 13:46 | Produced by Tolley Read more Read more

Non-business expenses

Non-business expensesIntroductionIn order for an expense to be tax deductible it must be incurred because of an employee’s employment. Any non-business related expense is, therefore, not relievable except in some very particular circumstances.This guidance note deals with three separate issues. The

14 Jul 2020 12:16 | Produced by Tolley Read more Read more