Mechanic trying to claim for tools

Luke_Rob

Hi, im after alittle guidance on claiming for tools purchased for my job.

A company called tax rebate service offer to claim for your tools purchased, but take 30% off the top. They say they can claim further back than 5 years?

I know through form p67 i can only claim back to 4-5 years i think it is, I did some digging and apparantley this company claims throught capital tax and claims small tools under machinery/plant equip, Can i claim this my self the capital tax way or will i have to go through the company to claim further back than 5 years?

I purchased my first toolbox back in 2012 i think it is and have the credit agreement stating the amount payable and finance information showing on this.

McKneff

I dont think you can claim back the actual cost of the tools but maybe you could claim back the tax on the tools.

Ignore these people. Ring your local HMRC and get the correct information from them

laticsforlife

Tools are called capital items - I think you've understood this.

So say you earn £1,000 from working, and spend £500 on tools and another £500 on stock (say on whatever it is you do with those tools) -then you've made no profit in cash terms in yr1.

But for tax you've made £500 profit, as those tools can be used for years to come (potentially).

You can though also claim Capital Allowances on tools, and if we keep it really simple, in year 1 you can claim 20% (so £200); now your taxable profit is £300.

Year 2 you've already claimed £200, leaving £800 in the pot, and 20% of that is £160, which is what you deduct in yr2, and so on each year (you never really get to zero because you add into the pot whatever new items you bought, and claim 20% of the new total).


There is another way of claiming called renewals, where you claim nothing on the first set of tools (ever) but as you replace them you simply knock that cost off your revenue profit.

So lets say in year 1 nothing breaks or wears out, but in year 2 you replace £100 of tools, then you still have £500 profit in year 1 but in year 2 you can knock the £100 off your regular profits (income less expenses).

McKneff is right, these companies are no better than ambulance chasers or PPI firms, avoid like the plague - they set themselves up with HMRC on your tax account with your permission! and any refunds due for the subsequent years would be directed to them until you realised you were being ripped off.

Do it yourself.

[Deleted User]

laticsforlife wrote: »

Tools are called capital items - I think you've understood this.

So say you earn £1,000 from working, and spend £500 on tools and another £500 on stock (say on whatever it is you do with those tools) -then you've made no profit in cash terms in yr1.

But for tax you've made £500 profit, as those tools can be used for years to come (potentially).

You can though also claim Capital Allowances on tools, and if we keep it really simple, in year 1 you can claim 20% (so £200); now your taxable profit is £300.

Year 2 you've already claimed £200, leaving £800 in the pot, and 20% of that is £160, which is what you deduct in yr2, and so on each year (you never really get to zero because you add into the pot whatever new items you bought, and claim 20% of the new total).


There is another way of claiming called renewals, where you claim nothing on the first set of tools (ever) but as you replace them you simply knock that cost off your revenue profit.

So lets say in year 1 nothing breaks or wears out, but in year 2 you replace £100 of tools, then you still have £500 profit in year 1 but in year 2 you can knock the £100 off your regular profits (income less expenses).

McKneff is right, these companies are no better than ambulance chasers or PPI firms, avoid like the plague - they set themselves up with HMRC on your tax account with your permission! and any refunds due for the subsequent years would be directed to them until you realised you were being ripped off.

Do it yourself.

The op talks about a P67 (I suspect that he means P87) which suggests that he is an employee.