Mechanic tax refund.....How?

mattgresty

Hi, i've been an employed mechanic since 1998 and have heard a lot lateley about a tool tax refund for all the tools that I have bought over the years. Looking into this and found that all the companies that offer to do this claim for me wish to take at least 30% of what I am owed from the tax man. How difficult would this be for me to take this on myself and not get ripped. Any advice would be great. Thanks, Matt

fengirl_2

You simply write a letter to your tax office sayng that you have been a mechanic since 1998 and wish to claim the fixed rate expense allowance for that trade. If you wish to claim extra for tools you have bought, you will need to make sure you have the receipts in case you are asked. If you don't have receipts, just stick with the fixed rate expense claim. If you are claiming for tools, you will have to set out how much you have spent each year (you can only go back 6 yrs) and confirm that these were replacements.
Your letter should also state that you want a payable order for previous years and a code change for this years' allowance only.

mattgresty

please forgive my ignorance (good with spanners, not with money), but what is a fixed expense claim. I have got all of my reciepts for all of my tools that i have purchased but why can i only claim for the last 6 years? Also my tools are not replacements, they are more or less additions to what i already have. Thanks

TM1976

The reason these claims occur and that these agencies target mechanics specifically is because they are based on the premise that mechanics spend a lot of money on small tools.

The flat rate expenses for 08/09 for this is £120 and for previous years was £100 so if you claimed on this basis you would probably get just over £100 in refunds.

If you have actually spent much more than £100 a year in tools and equipment you would be much more beneficial to make a claim on an actual basis. In order to do this you need to quantify how much you spent on tools and equipment over the last 6 years. You don't need the receipts just a record of what you have spent. As a suggestion you might want to look through old bank statements, credit card statements even prepare a reasonable estimate based on the years you can quantify.

Generally I wouldn't recommend that you used a % based service however if they could get you more than £25 a year in your pocket over writing a letter and claiming on a flat rate basis you would be better off doing this.

If you do this try and knock down the rate a bit though.

TM1976

6 years is the statute of limitations for tax claims.

If you have a claim relating to the tax year 03/04 make sure you get this in as soon as possible as you won't be able to claim any tax relief for that year after 31 January 2010.

mattgresty

How do these % based companies offer to get me the last 10 years for a tax refund or are the spinning me?

suso

HMRC recognise that certain professions require people to purchase things to do their job.

They have devised certain fixed amounts for each job. And they offer a refund on the income tax paid on the items. This is a fixed rate allowance (The majority of HMRC staff know it as a "FRE")

You can claim 6 years as that is how long the records are held for. (Technically 5 years and 10 months from the end of the tax year concerned, so the oldest year you can claim for is 2003-2004. and this must be claimed for before the end of January 2010)

If they are replacements, or new tools required for the job, as long as they are used purely for work and you have the receipts then you can claim the income tax back on them.. If no receipt then as Fengirl says you just get the standard allowance.

If you are just going to claim the standard FRE, then it should be processed no problem, if you are claiming for additional tools, be prepared for correspondence as its you first claim, I think they will be more likely to ask for proof (ie the receipts)

http://www.hmrc.gov.uk/manuals/eimanual/EIM32705.htm
http://www.hmrc.gov.uk/manuals/eimanual/EIM32715.htm

TM1976

If you have all the receipts then you have enough information to claim. You don't need to provide the actual receipts just do a list of the expenses.

Split the list by tax year provide P60s for each of the years (you will get 22% for claiming against years prior to 08/09.)

You can't claim back more than 6 years no matter who you are so I guess this isn't true if it's what people are telling you.

If HMRC want to see the reciepts you have them but you DON'T actually need the reciepts as you can claim on the basis of an estimate, however you may have found it more difficult to justify an estimate.

If you are spending less than £100 a year you are better off to claim the flat rate allowance, it you are claiming more claim on an actual basis.

suso

mattgresty wrote: »

How do these % based companies offer to get me the last 10 years for a tax refund or are the spinning me?

I have never heard of them being able to claim longer than the current 6 years limit.

HMRC only keeps PAYE records for that amount of time and then they drop off the system. If they are advertising being able to backdate 10 years of claims, play devils advocate and ask them how they propose to do that. It would be interesting to see their wording / answer and the legality of it.

Don't be put off by HMRC's reputation, write in to them, be prepared for a bit of a wait but they will respond asap.

mattgresty

Letter been draughted and will be in the post tomorrow.

mattgresty

Still waiting from HMRC for a reply. How long does it usually take to get a reply from them?