HOW TO CLAIM TAX REBATES
YOU COULD BE OWED HUNDREDS OF POUNDS…
27
JUNE, 2022
TAX REBATE
The cost of living crisis is biting, which has prompted many families to look more closely at their money matters.
It was revealed that inflation hit a new 40-year high of 9.1%1 at a similar time workers have just been hit by a hike in National Insurance contributions that have increased by 1.25 percentage points.
However, there are a few ways that you can claw back money from the taxman – rather than shell out – if you know where to look.
Better still, if you’ve never applied for a tax refund, you can backdate a tax claim for four years.
Here’s how you might be owed money:
1. Check your tax code
You could save on tax by simply checking your tax code. It’s easy to end up paying the wrong amount as even though HM Revenue & Customs (HMRC) issues the codes, the onus is on the individual to make sure it is correct. It is important to check it as even a small error could mean you’re overpaying by hundreds of pounds.
You’ll find it on your pay slip, P60 as well as on your annual letter from HMRC entitled the “coding notice”.
If you find that you’re on the wrong tax code, use the tax office contact details on your coding notice and raise your case with HMRC.
If you’re self-employed or unemployed then you won’t receive a tax code.
2. Uniform rebate
If you wear a uniform to work, pay for it and wash it yourself, you can get a tax rebate.
You don’t need to wear a full uniform to qualify for the refund – those who wear a branded T-shirt can claim. The amount you get varies depending on your tax rate and the industry you work in.
The standard flat rate expense allowance (FREA) for uniform maintenance is £60 (for 2022/23) – so basic-rate taxpayers can claim £12 back (20% of £60), and higher-rate payers £24 (40% of £60)2. Even better, you can get back-dated payments for four years (so that’s a total of five including the current tax year).
You don’t need to pay anyone to claim the money, you can do it yourself for free by filling out the P87 claim form on the Government website www.gov.uk. Once you’ve registered, your tax code will change, so you’ll be taxed less in the future. If you’re self-employed you should claim uniform and laundry expenses when filling in your self-assessment tax return.
3. WFH
If you’ve worked from home during the pandemic, you may also be able to claim back tax on the extra costs associated from not being in the office.
Since April 2020 you can claim tax relief on £6 per week. Previously if you were forced to work from home during 2019 you could claim tax relief on £4 per week3.
The amount you get back based on the rate at which you pay tax. For example, if you pay the 20% basic rate of tax you would get £1.20 per week in tax relief – this adds up to around £60 per year.
If you pay higher rate tax, your relief will be worth 40% or £2.40 per week – so around £125 for the year.
“Since April 2020 you can claim tax relief on £6 per week.”
4. Marriage allowance
The marriage allowance is a little-known tax break that can put a little money in your pocket if you’re eligible and have not taken advantage. It allows you to transfer £1,260 of your personal allowance to your spouse or civil partner if they earn more than you. However, there are eligibility rules – one of you must be a non-taxpayer and one must be a basic-rate taxpayer. Higher or additional-rate taxpayers aren’t eligible for this allowance.
Marriage tax allowance for the 2022/23 tax year is worth up to £252 – but you’re able to make a claim for all four previous tax years.
As well as reclaiming tax owed, it’s crucial that individuals make use of tax breaks and allowances. This might require the help of a professional to maximise tax efficiency.
PROVIDING NEWS AND VIEWS TO SUIT ALL NEEDS
This Blog is published and provided for informational purposes only. The information in the Blog constitutes the author’s own opinions. None of the information contained in the Blog constitutes a recommendation that any particular investment strategy is suitable for any specific person.
Tavistock Partners Limited is authorised and regulated by the Financial Conduct Authority. Tavistock Partners (UK) Limited is authorised and regulated by the Financial Conduct Authority. Tavistock Private Client Limited is authorised and regulated by the Financial Conduct Authority. The Tavistock Partnership Limited is authorised and regulated by the Financial Conduct Authority. Abacus Associates Financial Services is a trading style of Tavistock Partners (UK) Limited which is authorised and regulated by the Financial Conduct Authority. Duchy Independent Financial Advisers is a trading style of Tavistock Partners Limited which is authorised and regulated by the Financial Conduct Authority, All subsidiaries are wholly owned by Tavistock Investments Plc.
