Claiming Tax Back on Tools
As a mechanic, the chances are you’ve probably spent a considerable amount of money buying your own tools in order to do your job. These costs can quickly add up to thousands of pounds over the years.
The good news is that HMRC will allow you to claim back up to 20% of the cost of your purchases as long as certain criteria is met (see below). This is done by making a claim for either ‘Capital Allowances’ or ‘Flat Rate Expenses’.
ExampleJamie has been a mechanic at a fast-fit centre for 4 years. During this time, he has spent £3600 on hand tools and £1100 on a tool box. By making a Capital Allowance claim on his tools, Jamie can expect to receive a tax rebate of around £988.
How much can I claim?
You can typically claim back between 18% and 20% of the cost of the tools you have purchased. The actual amount will depend on several factors, including the date of purchase as well as how much tax you have paid through your wages.
Am I eligible to claim?
Whilst each claim is assessed on its own merits, you must meet the following basic requirements:
- You pay tax on your wages through PAYE.
- You are required to buy your own tools in order to do your job.
- Your employer does not reimburse you for the tools.
In some instances, we may also ask for a declaration from your manager confirming that you buy your own tools (we’ll provide the template for them to sign). We normally only ask for this if HMRC has rejected your claim and we are preparing an appeal.
Is there a time limit for claiming?
Stickily speaking, there is no time limit for claiming tax back on your tools. However, we recommend you make your claim within 4 years from the end of the tax year in which you purchased your tools.
Claiming within 4 years means can claim your full allowance much faster. For purchases made over 4 years ago, you may be required to spread the allowance over several years.
Ali received £1,015
Nathan received £1,120
David Received £1365
Jamie received £924