New to Self Assessment. Being on PAYE, what can I claim for?
Discussion
Thanks to the combined incompetence of Mr Osborne and the inglorious HMRC, and having crept over the £50k earnings mark last tax year, I find myself having to delve into the dreaded Self Assessment rigmarole just so I can have the privilege of returning some of the child benefit that my other half claimed last year. (Cheers, George. You twunt!)
It occurs to me that I might be able to make up for the cost and inconvenience by claiming for some of the tools that I've bought to use at work. My employer provides basic tools, but there are some things that I've bought myself because work won't provide them (various bits from a torch, batteries and charger to impact drivers and a battery drill, and stuff like memory sticks and SD cards to back up data from my work laptop/camera).
Is it possible to claim back the tax on the portion of my income spent on work equipment? And if so, is a VAT receipt sufficient evidence, or do they expect some means of proving the tools are used at work as opposed to just domestically?
Also are there any other "easy wins" that I, as a 40% taxpayer on PAYE and in full time employment with a company vehicle, can claim the tax back on?
Note that I don't want to try and "wangle" anything that I'm not entitled to, just that if I've got to spend time trawling through this paperwork anyway I may as well claim back as much as I legitimately can.
Ta,
Jonny
It occurs to me that I might be able to make up for the cost and inconvenience by claiming for some of the tools that I've bought to use at work. My employer provides basic tools, but there are some things that I've bought myself because work won't provide them (various bits from a torch, batteries and charger to impact drivers and a battery drill, and stuff like memory sticks and SD cards to back up data from my work laptop/camera).
Is it possible to claim back the tax on the portion of my income spent on work equipment? And if so, is a VAT receipt sufficient evidence, or do they expect some means of proving the tools are used at work as opposed to just domestically?
Also are there any other "easy wins" that I, as a 40% taxpayer on PAYE and in full time employment with a company vehicle, can claim the tax back on?
Note that I don't want to try and "wangle" anything that I'm not entitled to, just that if I've got to spend time trawling through this paperwork anyway I may as well claim back as much as I legitimately can.
Ta,
Jonny
If your employer doesn't pay the maximum (45 ppm?) mileage allowance than you can put the difference through your self-assessment.
My employer is reducing our reimbursement from 45ppm to 15ppm which doesn't even cover fuel these days. But putting it through my tax return means I reduce my taxable income by 30p for each mile travelled. So I'm actually getting closer to 30ppm (ie 15p + half of 30p).
Does that make sense?
My employer is reducing our reimbursement from 45ppm to 15ppm which doesn't even cover fuel these days. But putting it through my tax return means I reduce my taxable income by 30p for each mile travelled. So I'm actually getting closer to 30ppm (ie 15p + half of 30p).
Does that make sense?
To reclaim expenses, such as tools, clothes etc. HMRC use the "wholly, necessarily and exclusively" rule, i.e. they are required to do your job and can be only used for your job to allow the expenditure.
It's some time ago I studied this but a case sticks in my mind to do with barrister's court room clothes. Wigs were allowed, but gowns and black tights (for women I think ) were not as they could be used in other scenarios.
It's some time ago I studied this but a case sticks in my mind to do with barrister's court room clothes. Wigs were allowed, but gowns and black tights (for women I think
) were not as they could be used in other scenarios. uknick said:
To reclaim expenses, such as tools, clothes etc. HMRC use the "wholly, necessarily and exclusively" rule, i.e. they are required to do your job and can be only used for your job to allow the expenditure.
It's some time ago I studied this but a case sticks in my mind to do with barrister's court room clothes. Wigs were allowed, but gowns and black tights (for women I think ) were not as they could be used in other scenarios.
Is this for people on PAYE only as I claim for a lot of equipment that could be used in my off the job time but I am a Sole Trader.It's some time ago I studied this but a case sticks in my mind to do with barrister's court room clothes. Wigs were allowed, but gowns and black tights (for women I think
) were not as they could be used in other scenarios. Yes, my quote was for PAYE as the OP is.
It is slightly different for self employed under Schedule D case 1, sole traders (if that is still the current schedule).
If you want full tax relief on the item the wholly etc. clause would still apply. However, if you use something both personally and for business - e.g. an internet connection at home - you can claim for the part of the cost that you’ve used for business.
Although, I've no idea how close the HMRC inspect the receipts to check what use the item claimed for is put to.
It is slightly different for self employed under Schedule D case 1, sole traders (if that is still the current schedule).
If you want full tax relief on the item the wholly etc. clause would still apply. However, if you use something both personally and for business - e.g. an internet connection at home - you can claim for the part of the cost that you’ve used for business.
Although, I've no idea how close the HMRC inspect the receipts to check what use the item claimed for is put to.
Thanks chaps
UkNick, that effectively rules it out then as of course my tools can be used (and indeed are used) for more than just my day job. Bummer, dude.
Zigster, i'm not sure that applies to me, I thought the 45ppm rate was for using your own car for work and so includes the insurance, road tax, maintenance etc costs whereas these are all already paid for as part of running my co. car, and i'm reimbursed for business mileage at 15ppm. Is this correct or do I have the wrong end of the stick? Does seem counter intuitive as my business use running costs are actually covered by my employer, all I pay for is fuel for.non business use, benefit in kind theft - I mean, tax - and the tradeup for a slightly fancier car than the basic allowance would cover.
UkNick, that effectively rules it out then as of course my tools can be used (and indeed are used) for more than just my day job. Bummer, dude.
Zigster, i'm not sure that applies to me, I thought the 45ppm rate was for using your own car for work and so includes the insurance, road tax, maintenance etc costs whereas these are all already paid for as part of running my co. car, and i'm reimbursed for business mileage at 15ppm. Is this correct or do I have the wrong end of the stick? Does seem counter intuitive as my business use running costs are actually covered by my employer, all I pay for is fuel for.non business use, benefit in kind theft - I mean, tax - and the tradeup for a slightly fancier car than the basic allowance would cover.
Business mileage as said above.
If you have a company car but no fuel card I'm not sure what the rates are though.
Professional fees are an easy one if you're the member of a union or institute for your trade.
Expenses for meals when you're away from your normal place of work.
I'm gonna have to do my first self assessment this year, not looking forward to it!
If you have a company car but no fuel card I'm not sure what the rates are though.
Professional fees are an easy one if you're the member of a union or institute for your trade.
Expenses for meals when you're away from your normal place of work.
I'm gonna have to do my first self assessment this year, not looking forward to it!
I've had to it too this year, having PAYE and a few bits and pieces on the side, plus this child benefit debacle.
I ended up paying an accountant, but from memory I could claim business miles but only for my sideline projects and not for my main job as this was just daily commuting. I also couldn't offset any property rental losses against other profits, not could I offset the child benefit against these profits.
Basically, your b
ks are in a tax shaped vice and, like the house of gambling, the tax man always wins.
What some of those loses/expenses stuff does though is to increase the threshold at which you start to pay tax, or something like that.
A good accountant will be able to sort it for you. I can recommend mine (who also came recommended - PM me if you want his details). He's reasonable and you get a copy of all the forms so you could do it yourself next year if you needed.
I ended up paying an accountant, but from memory I could claim business miles but only for my sideline projects and not for my main job as this was just daily commuting. I also couldn't offset any property rental losses against other profits, not could I offset the child benefit against these profits.
Basically, your b
ks are in a tax shaped vice and, like the house of gambling, the tax man always wins.What some of those loses/expenses stuff does though is to increase the threshold at which you start to pay tax, or something like that.
A good accountant will be able to sort it for you. I can recommend mine (who also came recommended - PM me if you want his details). He's reasonable and you get a copy of all the forms so you could do it yourself next year if you needed.
via self assessment each year, heres a few things you can claw back some tax on:
if you have a home office you can claim £4 a week allowance without having to produce any bills
save all your receipts for money you give to charities and claim tax relief on that too
as you are a 40% tax payer, claim tax relief on any payments into pensions (likely your provider is only getting tax relief back for you at 25%)
car expenses (already mentioned) keep business mileage records, and claim back tax relief on 45p a mile for 10K miles and 25p a mile thereafter
submit your claim on line and any refund is usually paid in under a week, direct into your bank
Watch out though, as HMRC will try to be clever and adjust your future tax code to suit, and you will get a coding notice through that includes allowances for what you claimed the previous year.
Which is fine of course if you do exactly the same business miles each year etc ....personally I don't know how much I will drive each year. So I review the tax code they send, and call them to re-adjust the code down a bit. I prefer to be "in credit" with HMRC and know they will likely owe me a few hundred quid each year, rather than know I've got a bill coming for unpaid tax.....
then as soon as I get my P11D from each year from employer, usually in May/June, I do the Self assessment online and get a few hundred back from the taxman the week after. Its a motivator to get it done if you know there's money coming your way
if you have a home office you can claim £4 a week allowance without having to produce any bills
save all your receipts for money you give to charities and claim tax relief on that too
as you are a 40% tax payer, claim tax relief on any payments into pensions (likely your provider is only getting tax relief back for you at 25%)
car expenses (already mentioned) keep business mileage records, and claim back tax relief on 45p a mile for 10K miles and 25p a mile thereafter
submit your claim on line and any refund is usually paid in under a week, direct into your bank
Watch out though, as HMRC will try to be clever and adjust your future tax code to suit, and you will get a coding notice through that includes allowances for what you claimed the previous year.
Which is fine of course if you do exactly the same business miles each year etc ....personally I don't know how much I will drive each year. So I review the tax code they send, and call them to re-adjust the code down a bit. I prefer to be "in credit" with HMRC and know they will likely owe me a few hundred quid each year, rather than know I've got a bill coming for unpaid tax.....
then as soon as I get my P11D from each year from employer, usually in May/June, I do the Self assessment online and get a few hundred back from the taxman the week after. Its a motivator to get it done if you know there's money coming your way
A few tips
1. Anything which you can claim/allowable deductions out them into a folder as you go through the year (finding them when you start the form otherwise is a PITA or you simply don't claim what your rightly entitled to)
2. As soon as the online portal for the next tax year is open get it done straight away - even if you owe £ then that will not be due until 31/1 of the next year so time to save up.
3. It really doesn't take long - Mine isn't a straight forward return yet from turning on the PC to submitting it doesn't even take one hour.
4. Never ever forget to include all income if your caught out it can be/will likely be jail time loss of your job
1. Anything which you can claim/allowable deductions out them into a folder as you go through the year (finding them when you start the form otherwise is a PITA or you simply don't claim what your rightly entitled to)
2. As soon as the online portal for the next tax year is open get it done straight away - even if you owe £ then that will not be due until 31/1 of the next year so time to save up.
3. It really doesn't take long - Mine isn't a straight forward return yet from turning on the PC to submitting it doesn't even take one hour.
4. Never ever forget to include all income if your caught out it can be/will likely be jail time loss of your job
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