Why Evidence Matters for Tax Relief Claims

The excuses HMRC won’t accept

What do the following statements have in common?

• “My wife has been seeing aliens.”
• “My mother-in-law is a witch and put a curse on me.”
• “I fell in with the wrong crowd.”

These were all real excuses given to HM Revenue and Customs (HMRC) for filing tax returns late. Unsurprisingly, HMRC showed little sympathy.

While these examples are amusing, they highlight a serious point: HMRC expects credible explanations and solid evidence. And this doesn’t just apply to late filings—it applies equally to tax relief claims.

Claiming expenses? HMRC will want proof

A common area where issues arise is employee expense claims.

For example, an employee may incur work-related costs that are not reimbursed by their employer and attempt to claim tax relief through their self-assessment tax return. However, HMRC can open an enquiry to check whether those expenses meet the strict legal test.

To qualify, expenses must be:

• Wholly
• Exclusively
• Necessarily incurred

in the performance of employment duties (ITEPA 2003, s336).

This is a high bar—and one that frequently leads to disputes.

The hidden challenges of expense claims

Many taxpayers are aware of the “wholly, exclusively and necessarily” rule, but fewer understand the additional conditions that must also be met.

To successfully claim tax relief, the expense must:

• Be required by the role itself, not just helpful or convenient
• Be something that every employee in that role would need to incur
• Be personally paid by the employee
• And crucially, be supported by evidence

It’s this last point—evidence—that often causes problems.

A real case: When missing receipts cost thousands

A recent case highlights just how strict HMRC (and the courts) can be.

In Mukuna v HMRC [2025], a bus driver claimed tax relief on various expenses, including:

• Protective equipment during the Covid-19 pandemic
• Accommodation for himself and his family
• Equipment needed following a road traffic accident

However, there was a major issue: no supporting receipts.

The taxpayer explained that the documents had been stored in his loft and were destroyed by rodents. He also claimed that:

• Some payments were made in cash
• Bank records were incomplete
• Replacement receipts could not be obtained

HMRC rejected the claims due to lack of evidence. The case went to the First-tier Tribunal, which agreed with HMRC.

The outcome was severe:

• The expense claims were disallowed in full
• Additional tax was charged
• A penalty for deliberate inaccuracy was upheld

This demonstrates that without evidence, even genuine expenses may be denied.

Key takeaway: Evidence is everything

This case reinforces an important message:

It’s not enough for an expense to be real—it must be provable.

Even if an expense appears reasonable, HMRC will not accept it without supporting documentation.

While lost receipts are not always fatal, you must still be able to demonstrate:

• Proof of payment (e.g. bank statements)
• A clear link to your employment duties
• That the expense meets all statutory conditions

Practical tips to protect your tax relief claims

If you regularly claim work-related expenses, consider the following:

• Keep digital copies of receipts (photos or scanned copies)
• Avoid paying in cash where possible
• Retain bank statements and transaction records
• Don’t estimate expenses using round numbers
• Review claims carefully before submitting your tax return

Failing to do so could result in HMRC enquiries, additional tax liabilities, and penalties.

Need help with expense claims or HMRC enquiries?

If you’re unsure whether your expenses qualify for tax relief—or if HMRC has opened an enquiry into your return—it’s important to act early.

At Merranti Accounting, we can:

• Review your expense claims
• Ensure compliance with HMRC rules
• Support you during enquiries and disputes

Get in touch with us today to make sure your claims are accurate, compliant, and fully supported.