Happy Mechanics- Claiming Back Tax on Tools

lrb7691

Hi Guys,

My other half has been approached by Happy Mechanics, who claim back for tools.

He is an employed mechanic and MOT tester in a small independent garage. He purchases all his own tools for use at work. He has used Happy Mechanics to claim back tax before but I've read the small print and they take quite a large fee for doing so.

I'd like to complete this without the use of a third party. I've reclaimed tax on uniform before with a simple letter, but having searched the internet i can't find any clear guidance with regards to mechanics and claiming back for tools.

Can anyone give me any assistant on this? I almost feel like it would be easier to use the third company but i don't want them to take lots of his hard earned cash!

Thanks in advance.

00ec25

depends on how much he is claiming for and over how many years and if he gets lucky doing it the lucky way

lucky way
if within the last 4 years then complete a Form P87 for each year and submit , if for more than £2,500 HMRC will make him fill out a full blown tax return - of course this is nothing to be daunted about because I assume OP simply has income from his employment and possibly some interest on his savings

the procedure for claiming using the Form P87 and the time limits are here :
http://www.hmrc.gov.uk/incometax/how-to-get.htm

correct way
if HMRC reject the claim on the basis that he cannot claim new tools as an expenses item (which is technically the correct application of the rules - but you may get lucky) or for you need to go back longer than 4 years, then it is slightly more complicated. in that case he needs to submit a claim for capital allowances (aka "writing down allowance") as that is actually the correct approach and is how the claims companies do it
http://www.hmrc.gov.uk/manuals/eimanual/EIM50700.htm

capital allowances have numerous rules but fundamentally:
up to 6 April 2008 he can claim 40% or 50% (depending on the year) of the cost in the year of purchase as a "first year allowance" with the balance spread over the remaining years as writing down allowance
from 6 April 2008 the rule changed to allow a much simpler 100% of the cost in the year of purchase as an "Annual Investment Allowance"

I doubt he will exceed the capped amounts allowed each year so just work through the guide methodically and there is no need to use a claims company at all
http://www.hmrc.gov.uk/manuals/eimanual/EIM36500.htm
http://www.hmrc.gov.uk/manuals/camanual/CA23230.htm

lrb7691

Thanks! I'm so rubbish with all this tax stuff, he can get a list from Snap On of all the tools he's bought for each time frame so i'll get him to get one of those and go from there!

Thanks again!

Superted1986

My other half works as a Mechanic and has spent around £17,000 since 2005 on his own tools. Becuase he's not self employed does this mean he can only fill out the P87 form for the most recent purchases rather than claiming back from the start?

00ec25

Superted1986 wrote: »

s rather than claiming back from the start?

he can only claim back as far as 2010/11
see time limits for getting tax relief: http://www.hmrc.gov.uk/incometax/how-to-get.htm