Tax Rebate Services take a look at why most mechanics are owed a tax rebate.
You are probably so used to your day-to-day spend on work expenses that you don’t even recognise them as extra costs any more. All the things that you cannot work without and you are usually expected to own – like tools and equipment – really add up over the course of your working life. Sound familiar?
The Tax Office acknowledges your expenditure on work expenses through particular tax allowances for mechanics and auto technicians. This means that you are entitled to reclaim the tax you have paid on these items. There is only one catch – it is not an automatic refund situation, you have to submit an official claim to HMRC. Unfortunately thousands of mechanics are missing out on the money they are owed because they are unaware of what can be done.
What work expenses can mechanics claim for?
Of the vast number of tax allowances available to all taxpayers, the most common claims in the motor industry are:
- Buying tools, toolboxes and other equipment
- Finance payment tax relief on the interest part of payments made under a finance agreement
- Buying work wear including protective clothing like safety boots
- IMI subscription fees
How much money is a claim worth?
Every claim is calculated on a case-by-case basis by HMRC, with factors like the amount you earn and tax you pay effecting your claim value.
A general rule is approximately 18% of your total tools purchases. The average initial claim can be over £900.
Can you only make a claim if you have receipts?
There are two ways to get your tax rebate and it all depends on whether or not you have any receipt evidence to prove your purchases.
- The ‘Tool Allowance’ is a ‘flat rate expense’ of £120 that you can claim for tools without needing any receipts. Basically, this is worth £24 per year and can be backdated for 4 years.
- You can usually claim back a lot more if you have all your receipts because the calculation is then based on about 18% of the actual amount you have spent on tool purchases. If you are still using the tools, then this claim can go back to whenever they were originally purchased as long as the tool is still in use.
It doesn’t matter if you bought the tools at a wholesaler, online or at a hardware store – just keep the receipt!
Does my employer have to pay the rebate?
No, your employer is not liable for your tax rebate and will not be contacted during the claim procedure.
Can this be classed as tax ‘avoidance’ or ‘evasion’?
Absolutely not. The work expenses tax allowance system was set up and is run by HMRC. It is government sanctioned and completely above board.
Other tax allowances mechanics can claim
- Travel costs and mileage -if you use your own car to different work locations
- Professional bodies and Journals fees – like the Institute of the Motor Industry
It can take up to three months for HMRC to process your claim; it depends on their current workload. You continue to save on your future tax bill because your tax code will be changed to include the necessary allowances.
It requires time, effort and knowledge to ensure you get back all of the tax relief you are entitled to which is why many mechanics and auto technicians consider it wise to seek the advice of a tax expert. Tax Rebate Services specialise in helping mechanics and other motor industry professionals. It offers a free review and will make sure that your claim is maximised to include all of your legitimate work expenses.