According to a recent survey by Which? about one in five people have been contacted by a tax refund company. Another survey by the Low Income Tax Reform group also found that some tax rebate companies have questionable ethics, and are often not regulated by a professional body. Often these parasitic rebate companies will actually take between 25% and 48% of your tax refund! So, to avoid the potential for any exploitation, hard-to-justify-fees, or potential mis-selling by such a company for a tax rebate, tax refund or tax reclaim – what can you claim yourself, and what might you need an accountant to help you with?
What to be careful of when dealing with a tax claim company
Firstly, consider using a firm of accountants instead of tax claim company!
Secondly, they will often try to tie you in to a multi-year contract and even to getting a share of a refund they haven’t helped to get. Check the details before signing.
Thirdly, HMRC will never write, call, text or email suggesting you are due a refund – so if you get one of these, it’s definitely spam!
So, what can you claim for a tax refund and how can you get it yourself? Here are 12 different tax rebate claims where you or your business can claim a tax refund.
1 Mileage claims
As an employee you can claim business mileage. If you aren’t reimbursed by your employer you can claim from the taxman. You can claim 45p per mile up to 10,000 miles and 25p thereafter. If you claim from the taxman then you get a refund of 20% or 40% of this amount (depending on your tax rate). You can claim for up to 4 years’ worth of mileage from HMRC and all you need is to send HMRC a letter with details of your mileage, and your name and address details, NI number and bank details.
As a business if you pay mileage claims to your employees, you can claim VAT relief on the various mileage claims. This is a bit more complicated but still something you can do yourself. You need to split your mileage claims into VAT quarters, then to work out the VAT proportion of the approved mileage rate. This needs to be detailed per vehicle as different vehicles can have different mileage rates. You can go back up to 4 years, and make the claim as a standalone letter to HMRC or as part of your VAT return.
2 Marriage Allowance claim
Claiming for the marriage allowance is a way of transferring 10% or £1,260 of one spouse’s tax free allowance to the other spouse. This is worth £252 of reduced tax bills! One spouse needs to have an income of £12,570 or less and your partner must earn less than the 40% tax threshold of £50,270. Very importantly you can claim for up to 4 years. You can apply online using the HMRC website or by telephoning or writing a letter to HMRC.
3 Use of home claims
With so many of us working from home this is more relevant than ever. If you have been told to work from home by your employer then you can claim up to £6per week – and can claim for up to 4 years. For a 20% taxpayer this is worth £62.40 per year. Potentially you can claim more – but you have to be able to justify your costs and claim if you want to claim more. You can claim on your self-assessment tax return or via HMRC’s website or by writing a letter to HMRC.
4 Uniform claim
If you wear a uniform for work then there is a flat rate allowance you can claim either on your tax return or by writing to HMRC. HMRC have a list of occupations and how much they can claim. Note that you can claim for up to 4 years.
5 Travel, food and overnight claims
If you have to travel for work and the costs are not reimbursed by your employer, then you can claim for travel costs, parking, tolls, food, drink and overnight accommodation. Note this does not include ordinary commuting, but only business related travelling. The rules can get very complex, and either spend time doing your research or ask an accountant for help!
6 Professional fees and subscriptions claims
HMRC have a long list of professional bodies and unions and how much of their subscription you can claim tax relief on. If you have paid the relevant subscription then you can claim tax relief on it. You can claim for up to 4 years either online via HMRC’s website or by writing to HMRC.
7 Job related expenses claim
If you spend on job related expenses and don’t get reimbursed by your employer, then you can claim tax relief with HMRC. For example, a hairdresser could claim the cost of a pair of scissors used for work. You can claim for up to 4 years either online via HMRC’s website or by writing to HMRC.
8 R&D tax credit claims
If you run a limited company and meet the criteria to have qualifying research and development costs, then you can claim either an tax reduction or a tax refund. Whilst you can do this yourself, most companies don’t because it can be very complicated. So much so, that we as accountants use consultants to help us get this right in complex cases. Claims are made on your online corporation tax return. We can help you to claim this relief, so please get in touch. However, don’t delay, there is a 24 month time period in which to make a claim.
9 Capital allowances claims
Most businesses claim the allowances they are due on capital expenditure. But if you didn’t then you can go back 4 years and amend a tax return to claim allowances. There are special circumstances when you have an opportunity to claim capital allowances; for example, when you purchase a business property. It’s always a good idea to involve an accountant to get this right.
10 DIY Housebuilder VAT refund claims
If you have planning permission to build a residential property and are doing most of the work yourself, rather than using a property developer, then you can claim a VAT refund on your build costs. There are deadlines for such a claim and the process is fairly straightforward if you want to make the claim yourself. It is something we help with for those who need some extra assistance.
11 Stamp Duty Land Tax (SDLT) refund claims
There are several reasons why you might potentially overpay SDLT when purchasing a property. For example, when you purchase two properties on the same title deed, or when you purchase a main residence before selling your previous one. There are time limits for such claims. If you are prepared to do some research you can make a refund claim yourself. We can help with this sort of claim if you need assistance.
12 SEIS/EIS/VCT tax claims
If you have invested in Seed Enterprise Investment Schemes, Enterprise Investment Schemes, Community Investment Tax Relief (CITR) or Venture Capital Trust (VCT) investments then you can claim tax relief. Most people who do this sort of investment are likely to also prepare a self-assessment tax return. Claims can be made using your self-assessment tax return or by writing to HMRC using the forms sent to you by your investment company.
Income tax refund claims for individuals can be made from HMRCs website by following this link to HMRC’s claim form https://www.tax.service.gov.uk/claim-tax-relief-expenses. Or by logging into your online tax account with HMRC.
Obviously you might want the help of a reputable accountant to make your tax rebate claim, instead of doing it yourself. As properly qualified and regulated accountants we can help! For the claims we have made in the past we have either charged a fixed fee or a 10% commission. If you would like help working out whether you can get a tax rebate, how much to claim or with making any of the claims noted in this article then please get in touch.
