Employee tradesman - Tax relief on tooling.

tartanterra

The company I work for provide me with a company vehicle for work purposes, work clothing, safety equipment and major tooling.

I do however, have to provide my own safety boots and hand tools (as stated in my contract).
I have spent around around £3000 since starting with them around 12 months ago, building up my hand tools and although I have everything I now require, I estimate "wear and tear" will account for around around 10% of this each year.

I already fill in a self assessment form each year as I let property and receive an Armed Forces pension as well as my earnings from my job.
Should I be claiming anything on my self assessment for these expenses I am incurring as part of my job?

Regshoe

tartanterra wrote: »

The company I work for provide me with a company vehicle for work purposes, work clothing, safety equipment and major tooling.

I do however, have to provide my own safety boots and hand tools (as stated in my contract).
I have spent around around £3000 since starting with them around 12 months ago, building up my hand tools and although I have everything I now require, I estimate "wear and tear" will account for around around 10% of this each year.

I already fill in a self assessment form each year as I let property and receive an Armed Forces pension as well as my earnings from my job.
Should I be claiming anything on my self assessment for these expenses I am incurring as part of my job?

You should be able to claim capital allowances for the tools, as they are necessary for your job and your company does not provide them. Check out this helpsheet:

http://www.hmrc.gov.uk/helpsheets/hs252.pdf

There is a section at the bottom of page 16 regarding claiming allowances if you are an employee.

I believe the tools would qualify for the Annual Investment allowance - which would mean that you could claim the full £3000 as incurred and not worry about claiming a 20% capital allowance each year. Presumably as an employee rather than self employed you would divide the costs by financial year rather than any account period basis as you wouldn't be drawing up annual accounts.

tartanterra

Thank you for that, it's very useful.

I have trawled through hundreds of pages on the HMRC website looking for something like this, with no luck until now!
Despite the propaganda, tax IS most definitely taxing.:D

John_Pierpoint

As an employee, you are likely to find that there is an agreed allowance for your trade each year.
You can exceed that by being able to submit receipts etc BUT step too far out of line and you might fall foul of the "wholly & necessarily" test.
Because as a servant of your employer, your master should be supplying you with what is needed to do "his" job he is employing you to do, or reimbursing you and claiming such costs on his tax return where he can reclaim VAT (?) and pay less higher rate tax/corporation tax (?).

They must be things that each and every person doing your [that] job would have to provide [on behalf of that employer].

[My correction to HMRC, presumably you are not doing a "Job share"]

tartanterra

John_Pierpoint wrote: »

As an employee, you are likely to find that there is an agreed allowance for your trade each year.
You can exceed that by being able to submit receipts etc BUT step too far out of line and you might fall foul of the "wholly & necessarily" test.
Because as a servant of your employer, your master should be supplying you with what is needed to do "his" job he is employing you to do, or reimbursing you and claiming such costs on his tax return where he can reclaim VAT (?) and pay less higher rate tax/corporation tax (?).

They must be things that each and every person doing your [that] job would have to provide [on behalf of that employer].

[My correction to HMRC, presumably you are not doing a "Job share"]

I knew this was going to get complicated!
I'm not sure if I can now claim or not.
The first poster states that I can claim, the second poster suggests that my employer should pay for this.

To re-iterate:
I am an employee domestic, commercial and renewables electrician.
I have to provide my own handtools - as stated in my contract. This covers everything from screwdrivers to drills and grinders.
My employer provides "rare" use equipment, calibrated test equipment, safety equipment and "consumables" such as cutting grinding blades, drill bits etc.
This situation is not unique, and many smaller companies would expect this.

Do I make a claim to HMRC, or should I simply just accept that I'm unlikely to get anywhere with this?

John_Pierpoint

Here are the instructions to the guy who is receiving your claim:
http://www.hmrc.gov.uk/manuals/eimanual/EIM31715.htm

I'm nothing to do with HMRC and it is a long time since I was "on the tools" myself
BUT
If I got your claim, I would do two things:
1. I would look at the scale level of allowances that are given without the need to keep receipts.
2. I would look at your co-workers and see what they were claiming.

If everyone else is claiming 300 and you are claiming 3000 then alarm bells would ring.

Personally, I would ask my fellow workers what sort of claims they make, and see if my proposal shows out relative to the rest.
After all if you claim too little you are spoiling it for everyone else.

http://www.hmrc.gov.uk/manuals/eimanual/eim32730a.htm
http://www.hmrc.gov.uk/manuals/eimanual/eim32712.htm
http://www.hmrc.gov.uk/manuals/eimanual/eim31700.htm

etc.
etc.

There are lots of interlocking links but if you find yourself spending more time on your tax than you can earn doing your trade, then it is time to get an accountant and probably "go self employed".

What sort of vehicle is you employer providing and what are you allowed to do with it?

tartanterra

Once again, thanks for your reply.

I have a company van, which I take home.
The reason I take it home is simply that I am nearer our customer base than the office, so it saves my boss fuel!
It is only used for work.

Also, the £3000 was my initial cost of tooling when I changed trades, and therefore a one off. I estimate that my costs from now on would be less than 10% of that a year.

As for what everyone else claims (there is only four of us), no one else was aware that they could claim anything.
I have asked around all the other employed tradesmen when I have been on jobs, and although almost all of them have to provide some sort of tooling for themselves, none of them were aware that they may be able to claim. It seems that this is not very well known.

PlutoinCapricorn

I can't help directly, but just wanted to say that if you are definitely an employee and not self employed, in an ideal world the employer will provide everything that you need to do your work.

The next level up is when you pay for something yourself, and the employer reimburses the cost - often from the petty cash.

If there are other expenses for something that you must have, then you inform HMRC. The item must be wholly, necessarily and exclusively for your work.

I have a dentist friend who gets all the big equipment and many other things laid on, but has to buy her own 'loupe' and pay for professional subscriptions.

You can go back 4 years I think - it used to be 6.

John_Pierpoint

Beware of going shopping in the van (pick up partner in side street?;))
You could stop and buy a newspaper on your way to work.
HMRC has a list of examples on its web site.