Workers eligible for tax rebates on work expenses such as tools and uniforms should avoid paying fees for a free claim.
Employees that spend money on certain expenses for their job that their employer doesn’t cover the cost of, can claim money back from the tax man.
Typically this includes expenses such as replacing or repairing small tools, washing branded uniforms, business travel that doesn’t include commuting, or professional subscriptions to approved trade bodies relating to your job.
If you’re a basic-rate taxpayer you can claim £20 tax relief for every £100 you spend on such expenses. You can also claim back up to four years’ worth of these expenses, which means some could be in line for a large payback if they’ve never done so before.
However, make a quick search online and you’ll find a myriad of companies offering to help arrange the tax relief for these expenses. HMRC say that as many as 85% of eligible employees use these services, losing out on significant sums.
These companies charge 30% of the whole rebate in fees, an eye-watering amount for such a simple task. Moneywise has even seen some that come with a minimum payment of £45 which could wipe out much of the money you’re due to get back.
Instead, HMRC urges people in this position to cut out the middleman and fill out the tax relief form directly with them.
Angela MacDonald, director general of HMRC customer services, explains: “This is the easiest and quickest way to claim back tax relief on expenses and I’m delighted more and more workers are doing it directly online with HMRC.
“Tax relief isn’t available for all employment expenses which is why the online Check If You Can Claim tool is so handy – you can be reassured your claim will be approved and your full tax relief will be paid directly in to your bank account.
“We know what a difference tax relief can make to hard working customers, which is why we’re keen to make sure they get all the relief their entitled to by using our online service.”
How to claim
If you are paid through the Pay as You Earn (PAYE) system, you can use the HMRC claim tool to find out if you’re eligible for money back. Go to the HMRC website to do this.
If you don’t wish to do the process online you can fill out a P87 form instead and send to HMRC. If you have five jobs or more you’ll need to fill out the paper form too. Here's a link to the form.
Helen Thornley technical officer for the Association of Taxation Technicians says: “We welcome the move by HMRC to help individuals claim extra tax relief themselves as this means individuals will be able to keep more of the tax relief they are entitled to. For those with relatively straightforward tax affairs and who are confident with computers, this should be a useful tool to help them make claims online.
“However, for those who are not comfortable online we would like the tool to make it clearer that claims can be made by post or on the phone. At present, if the claim can be made online, this is the only option presented.”