Trying to claim uniform tax and tools VAT back - tax code change?

mattk1uk

Hi everyone,

I have recently applied to claim uniform tax and for VAT back on tools bought for my job (I’m a mechanic).

I did this through the online form P87 and the total cost of tools bought in tax year 2017-18 comes to around £2300.

I received a letter yesterday (see below) stating that my tax code has been updated to include Flat Rate Expenses (is that uniform tax?), but that my claim for Job Expenses does not meet all the conditions to qualify for them.

I have two concerns:

1. My current tax code is 1265M, I’m concerned I will lose my marriage tax allowance if this
changes. Is that correct (as HMRC stated in my letter)?

2. To claim VAT back on my tools as I believe I am entitled to, do I just need to send receipt
copies like they say, but with no other documentation such as employment contract etc?

Thank you in advance if anyone can help me here, I am most grateful of any input.

Dazed_and_confused

1. My current tax code is 1265M, I’m concerned I will lose my marriage tax allowance if this
changes. Is that correct (as HMRC stated in my letter)?

No. Why do you think this? You can check your new tax code in five minutes by looking at it on your personal tax account on gov.uk. Chances are it will have increased to 1271M.

2. To claim VAT back on my tools as I believe I am entitled to, do I just need to send receipt
copies like they say, but with no other documentation such as employment contract etc?

VAT is nothing to do with personal income tax. Are you registered as a business and also registered for VAT?

badmemory

However, to quote the letter, your new tax code has been issued separately so patience may well be a virtue here. HMRC letters seem to take some time sometimes. For example on the 17th of this month I received a letter dated the 4th.

mattk1uk

Hi Dazedandconfused, thanks so much for your reply

I took your advice and checked my tax code online (I didn't know I could do that) and it is now showing as 1277M so I'm happy about that

With regards to me claiming tax back for tools, I have done this before using an agent:

https://www.taxrebateservices.co.uk/

They take a 25% fee though so I'm trying to do it myself. It is because certain trades such as mine can claim VAT back on tools bought for work. I'm not registered as a business or anything like that, just an employee.

I understood the form to claim a tax rebate for tools is the P87 online form which is why I was a bit confused with HMRC's reply in my letter about that.

Badmemory; also thank you for your reply, I will await the letter but now it's not so important as I can see my new tax code online

00ec25

the VAT rate is 20% but you are not claiming VAT back on the tools because you are not a VAT registered business able to do so

what you are claiming is the income tax you paid on the money you spent purchasing those tools. Yes that is also 20% for a basic rate taxpayer, but you may be a great mechanic and be a higher rate taxpayer and would get 40% for example.

Your claim was refused because it was not supported by receipts and HMRC don't believe that your job meets one or more of the other 3 conditions. That is at the discretion of the person who dealt with it, but in your case they have followed the procedure and written to you with a clear reason why they have refused

rules for explaining the refusal:
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim31710

rules for receipts to send in:
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim31715
"The onus is on the employee to show that he or she has spent identifiable sums on deductible expenses"

So not only will you need to send them the receipts, but you will also have to explain why you have to purchase your own tools, as opposed to your employer providing them and show that such rules apply to all other mechanics at your garage.
I have to say I think HMRC are being harsh on you as it is hardly the first time a mechanic has claimed for tools and it is common practice in your trade that you buy your own, because otherwise the garage owner would be forever replacing tools nicked by his employees


yes "Flat Rate Expenses" (aka "FRE") is the term used for your "washing allowance" and you have been given the £120 rate (code 1265 to code 1277 = +12) because as an employee you fit into the category of: "trades ancillary to engineering - d. Motor mechanics in garage repair shop. £120"
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim32712

mattk1uk

Hi 00ec25

Wow thank you so much for you helpful reply, I am very very grateful!

You have made it very clear what I have to do next; send in copies of my receipts along with a letter explaining I have to purchase my own tools in this trade etc.

Also thank you for clearing up FRE

If I could thank you a million times I would

dori2o

mattk1uk wrote: »

Hi 00ec25

Wow thank you so much for you helpful reply, I am very very grateful!

You have made it very clear what I have to do next; send in copies of my receipts along with a letter explaining I have to purchase my own tools in this trade etc.

Also thank you for clearing up FRE

If I could thank you a million times I would

Although it's not a requirement that you do so you could also ask you employer for a brief note on headed paper that confirms they do not provide any tools/equipment etc for you or any other employee.

The decision is yours and it may not affect the outcome of your claim.

Whilst it may seem unfair to ask you to do this given that this particular trade is known for being in the situation where the employer does not provide the tools and equipment necessary to complete the work done (despite the fact that should employees refuse to do so the business would not last very long), it's not the case that EVERY employer in this trade does the same. Some do provide all tools and equipment, and where this is the case no expenses claim would be allowable.

A few years ago I saw a letter sent by an employer who had heard that his employees were making claims for tools and sent in a letter to HMRC confirming that he provided all necessary tools for the employees to use, but they refused to use them claiming they were 'rubbish/cheap/!!!!' (yes he actually used the word !!!!), and so most of them had provided their own.

In this instance we had to write to several employees telling them we would be removing any expenses from their tax code and that they would not be able to claim any further expenses for tools/equipment from this employer unless the business confirmed that they no longer provided the tools etc to the employees.

The fact the employees had bought better quality tools, or had bought alternatives to what was supplied because it made their job 'easier' made no difference, they were unable to claim further expenses as their equipment is provided to them by their employer. Even if they don't/refuse to use it. They chose not to use it and provide their own. In this case tax relief was not due.

There is also the issue of treating everyone fairly and this request would be made to anyone claiming expenses who had not provided sufficient proof that the cost has been incurred.

It's also to ensure that only applicable expenses are being claimed.

Having worked these claims I've seen some of the things that people claim for, either intentionally hoping it won't be noticed or by mistake.

With trades such as this many employees buy tools etc via tool franchises i.e. Snap On etc and many of them simply use the figure on their account statements as the amount they are claiming for, but they forget that the tax year runs April to April, or that Snap-On don't just sell things that they need to do their job, and so often include items from the wrong years in their claims.

They may also include non allowable items, for instance Snap-On branded radio's, mugs, childrens overalls, model cars bearing the Snap on logo, novelty Snap-On items etc etc.

I've even had one mechanic who wrote in appealing a decision to refuse some of the items he had claimed for which were on the receipts that he had sent in, and their values were included in the total he had claimed.

He was trying to argue that Snap-On Christmas tree decorations (baubles) were a necessary purchase in the performance of his duties, as the lack of a Christmas tree in the office would affect moral of the workers. This same person also tried to claim that the snap on advent calendars he'd bought (12 of) were necessary in the performance of his duties as he couldn't just buy his own as other staff would 'take offence' and this would cause 'irreparable damage to the working relationship' of the mechanics. (honest to God truth. I nearly fell off my chair when I read his letter)

Only by requesting the details/receipts can this information be confirmed.

mattk1uk

Hi dori2o,

Excellent reply to post, thank you so much!

I will approach my manager tomorrow and ask for him to sort me out a headed letter confirming they don't provide tools for workshop technicians. I'm sure he will be helpful in this.

I did think it was a little strange with the letter reply I received as I have already done this in the past but I used an agent last time. The whole idea this time is to try and do it myself and save the 25% fee (wise or not only time will tell ha ha).

That case you mention is hilarious about the calendars and Christmas tree decorations! Funny thing is I work with some people who would also share this mindset

I've just spent the last two hours collecting and organising my invoices so I think all I'm going to do is just send them in and see what happens. When I used an agent last time I received a cheque for the amount claimed minus their fee, will it be a similar scenario in my case this time?

Thanks once again for the super helpful replies on here, I'm very very grateful!

antonic

Dont send in the original receipts send in copies as HMRC may lose them !.

If they want the originals they will ask for them.

mattk1uk

Thank you antonic, sound advice!

I'll send copies only.

Cheers again