There are frequent misconceptions about this allowance.
It assumes zero employer contributions ie per diems. Total untaxed per diems for the year should be deducted, as should any direct expense claims you have made to the employer.
If the employer makes a contribution towards its pilots' allowable expenses (as shown in the above list), or provides a significant amount of the equipment shown in the list, the FRE for those pilots should be reduced accordingly
So there is a choice between using this flat allowance, or claiming individually for items, which may or may not be allowable. However, you cant just pocket your per diems AND pocket the £850 allowance (unless your per diems happen to be £850 short of your actual costs, which in my case flying long, long-haul trips on pitiful allowances, is possible).
The easiest (only?) way of making the claim is by doing a self assessment form, which anyone can choose to do.