Tag: Tax Rebate

Are you claiming your Flat Rate Expense Allowance tax refund?

Back in December I did a Blog about how to make your claim http://stevejbicknell.com/2011/12/20/how-to-claim-tax-relief-for-employment-expenses/

 

But many employees don’t seem to realise that they could be entitled to Flat Rate Expenses

If you have to spend money on tools or specialist clothing for your job you may be entitled to either:

  • tax relief for the actual amounts you spend
  • a flat rate deduction

Flat rate deductions are amounts that HM Revenue & Customs agreed nationally – or sometimes locally if conditions are very different – with trade unions or other bodies.

The deductions cover what’s typically spent each year by employees in different trades. For example, someone working in the clothing industry can get a deduction of £60 each year. A cabinet maker can get a deduction for £140 while the deduction for a stone mason is £120.

You don’t have to be a member of a trade union to get the deduction. You’ll also benefit from less paperwork – you won’t have to keep a record of all the individual amounts you spend.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/IncomeTax/Taxallowancesandreliefs/DG_078378

There is a full list of the Flat Rates at

http://www.hmrc.gov.uk/manuals/eimanual/EIM32712.htm

For example, I am the FD of SCA Group, we employ Scaffolders and the rate for Scaffolders is £140 per year, at 20% tax that means £28 as a tax refund.

steve@bicknells.net

The hidden capital allowances in your building

FA2008 introduced a new classification of integral features of a building or structure, expenditure on the provision or replacement of which qualifies for WDAs at the 10% special rate. The new classification applies to qualifying expenditure incurred on or after 1 April 2008 (CT) or 6 April 2008 (IT).

http://www.hmrc.gov.uk/manuals/camanual/CA22300.htm

The new rules on integral features apply where a person carrying on a qualifying activity incurs expenditure on the provision or replacement of an integral feature for the purposes of that qualifying activity. Each of the following is an integral feature of a building or structure –

  1. an electrical system (including a lighting system),
  2. a cold water system,
  3. a space or water heating system, a powered system of ventilation, air cooling or air purification, and any floor or ceiling comprised in such a system,
  4. a lift, an escalator or a moving walkway,
  5. external solar shading

Only assets that are on the list are integral features for PMA purposes; if an asset is not one of those included in the list, the integral features rules are not in point.

However, Plant and Machinery includes….

other building fixtures, such as shop fittings, kitchen and bathroom fittings

Many businesses have never claimed capital allowances for these items and I found this article by Steve Bone http://www.curtisplumstone.com/wp-content/uploads/2011/06/Election-Agreements-Steven-Bone.pdf

It explains how elections can be made to claim the allowances using S198 of the Capital Allowances Act 2001.

HMRC have further details on this link http://www.hmrc.gov.uk/manuals/camanual/ca26850.htm

The alternative is to agree a S562 ‘Just and Reasonable Apportionment’ of the sale price.

Elections need to be made within 2 years.

There are calculators on the internet to help you assess the potential value of your claim

http://www.portaltaxclaims.com/

http://www.cataxsolutions.com/calculator.html

steve@bicknells.net