From the tiniest nuts and bolts to vans and forklifts, there are some things that you just can’t do your job without.
It can often feel frustrating when you see most of your earnings from your last job going towards getting more tools for your next one. But, it is possible for you to claim tax back for buying and maintaining certain tools.
We reached out to Carrine Bogle, Customer Support Manager at APARI for the low-down on what monetary relief is available for tools, and how you can get involved and save some dough.
(Image source: APARI)
What is the tools tax relief?
Basically, you can reduce the amount of tax you pay, if you’ve used your own money to repair or replace small tools that you need to do your job, for example, a small drill.
It’s there to pay the tax on work-related expenses that haven’t been covered by your employer. YES, employed tradespeople who are paid via PAYE can claim tools tax relief.
What about self-employed tradespeople?
Self-employed tradespeople that complete a tax return can claim money back for tools and other business expenses on their tax return.
If your turnover is below £85k, you don’t need to break down your expenses into different categories. That’s how APARI have been able to create the really helpful 5 box return for tradespeople.
What tools are covered?
Tax relief covers other expenses, as well as tools. There are a number of things employed tradespeople can claim tax relief on, such as;
- Working from home expenses
- Uniforms, work clothing and tools
- Vehicles you use for work (e.g mileage)
- Professional fees and subscriptions
- Travel and overnight expenses
- Buying other equipment (e.g a computer that’s solely for work)
You can claim now for expenses going back up to 4 years – it’s best to do it before the year ends on the 5th April 2022.
HOW DO I GET STARTED?
It’s dead easy to check if you’re eligible and make your claim via the HMRC website.
If your claim goes through, HMRC will probably change your tax code, and sometimes, if you’ve been really good, they give you a tax refund.
For tools, uniforms and work clothing, you can either:
- claim the actual amount you spent – you will need to keep your receipts to prove the cost; OR
- you can use the flat-rate amount set by HMRC – and you won’t need any receipts. For Construction, these rates vary between £60 – £140 per year. HMRC will tell you which rate applies to you when you make your claim.
Have you seen our Talking Trade episode about money in construction? Watch it here.
Let us know about your experiences with tools tax.