Claiming Tax Refunds
As you know, investing and looking after our drivers has been paramount to our success. So, we wanted to make sure that you are aware that you may be able to claim tax refunds for up to 4 years. We cannot give you tax advice, but we can empower you with information and sources of free help. We don’t’ want you to be drawn into giving away 25% or more of your savings to low skilled bulk refund processing companies.
How do I Claim?
If your affairs are straight forward, there is a wealth of free information and an easy to complete forms on the Government’s website.
The first point to bear in mind is that you can only claim amounts that you have spent over any tax- free amounts we or a client has paid. You do need to keep receipts, mileage logs, information stored on your Digi cards, bank statements, credit cards statements etc. as evidence to support any claims you make. Although you will not need to send these to HMRC with the claim, they may ask you for them later.
The starting point for making an online claim is: Claim tax relief for your job expenses – GOV.UK (www.gov.uk)
If your total expenses are less than £2,500, you can do it online using the above link.
If your expenses are £2,500 or more per year, you will need to complete a self-assessment return. This can be completed either online or on paper. The starting point is: You can only claim these expenses using Self Assessment – Check if you can claim work related expenses – GOV.UK (tax.service.gov.uk)
If you have had more than five jobs in the period you are claiming for, you will need to apply by post using a form P87. This can be accessed here: Claim Income Tax relief for your employment expenses (P87) – GOV.UK (www.gov.uk)
If you have already claimed expenses previously, you may be able to just phone HMRC. You can claim by phone on 0300 200 3300 if your total expenses are less than either:
- £2,500 for professional fees and subscriptions or
- £1,000 for other expenses
You may need to be prepared for a long wait though! HMRC will ask you some security questions. So, you need to make sure your personal details and address are up to date in your personal tax account or you could fail telephone security. If you do not already have a personal tax account, you can set one up here.
What can I Claim?
You may be able to claim tax relief on money you have spent when working for up to 4 years. If the expenses are eligible for tax relief, you will receive the amount of tax you have paid on the expenses at your marginal rate of tax. So, for example, if you spent £1,000 and pay tax at 20%, you would be refunded £200.
The rules for claiming expenses for employees and directors of their own companies are extremely strict. So, you cannot normally claim tax relief on expenses for getting to work. The rules on travel for people in the recruitment sector and who work through their own business via an agency for end-hirers are even more complex. But there are specific reliefs which may be available to you.
Broadly the expenses they you may be able to claim will include:
- Uniforms, work clothing and tools – Claim tax relief for your job expenses: Uniforms, work clothing and tools – GOV.UK (www.gov.uk). So, for example, if you are required to wear specific items of clothing which have a logo permanently affixed which we or the client provides, you can claim your laundry costs. You can also claim the costs of any PPE or other safety items which neither the client or we provide (see below link for further information).
- Vehicles you use for work – Claim tax relief for your job expenses: Vehicles you use for work – GOV.UK (www.gov.uk). So, for example mileage travelling to a depot other than the one which you were initially engaged to attend. As mentioned above, this is a complex area and you do need to take professional advice from a suitably qualified person (see below).
- Travel and overnight expenses – so, for example, if you have incurred costs more than paid by us or a client and have evidence of expenditure.
- Professional fees and subscriptions – Claim tax relief for your job expenses: Professional fees and subscriptions – GOV.UK (www.gov.uk). So, for example the costs relating to renewing licences other than your car licence including medicals, CPC, and Digi cards etc.
What is a uniform and what flat rate allowances can be claimed: Check if you can claim flat rate expenses for uniforms, work clothing and tools – GOV.UK (www.gov.uk)
We have not mentioned working from home as this is unlikely to be relevant for most drivers. But information on this is included in the above links.
Is there anywhere else I can get more information from?
You can also look at the information provided by the Low Income Tax Reform group: Employment | Low Incomes Tax Reform Group (litrg.org.uk)
If your affairs are not straight forward, you need to speak to a suitably experienced adviser who understands drivers in the recruitment industry. If you do decide to engage with an advisor, then ask them for references from someone in a similar role to you. A good starting point to find an adviser would be: ATT/CIOT Portal – Find A Member (tax.org.uk)
Most reputable advisers will be prepared to have an initial no obligation chat free of charge to see whether they can help you.
This article is for information only and is not intended to be tax advice. It is merely to give you information to decide whether you may be eligible to claim tax relief without a business unnecessarily taking a large part of your savings in fees.