Tax Rebates for Mechanics
All About Tax Rebates for Mechanics
If you are a mechanic and have to buy tools to do your job, you will be able to apply for tax relief on the tools or equipment you purchase.
Working as a mechanic involves using many different tools which you will more than likely buy and pay for yourself as and when you need them. If you’re lucky, your employer will reimburse you for the cost of these but, if they don’t, you can apply for a mechanic’s tax rebate to claim for some of the expense.
To help you, we have produced a guide which details what tax relief you may be eligible for and how to go about submitting a claim. You can also email us to get an idea of how much tax you might be able to reclaim.
Will I be eligible for a tax rebate?
Yes, if you are a mechanic who has:
- Purchased any tools or equipment needed to do your job
- Paid for the tools yourself
- Not been reimbursed for the cost of the tools by your employer
What is a tax rebate for mechanics?
To help cover the cost of the tools and equipment they need for work, HMRC allows mechanics to claim tax relief on the cost of these purchases using a capital allowances claim process.
Some mechanics may already have a tax code that includes a tool allowance but they can still claim for the actual costs of the tools as well.
How much will the tax rebate be?
You can usually claim a rebate which is equal to 18% of the cost of any tools or equipment you purchase. You can also submit a claim for any tools you purchased over the past four years as well. If you still have valid receipts for purchases made over four years ago, you can claim for these too through a capital allowance claim.
So, even though you have a tools allowance included in your tax code, you can still claim a mechanics’ tax rebate to recover everything you are entitled to.
What proof of purchase will I need?
For every purchase of tools or equipment you make, you must have proof of purchase. Usually this will be in the form of a receipt from the seller or if you buy your tools through a specialist provider, a report of the activity on your account should do as long as it details the price of the items bought.
What about protective clothing and overalls?
Obviously mechanics need to frequently wash their overalls and most employers expect them to do this themselves. If you do wash your own protective clothing, you can claim £60 in every tax year against the cost. If there is a facility at your place of work for washing clothing then you won’t be eligible for this tax rebate.
Finance agreement tax relief
Many mechanics purchases expensive items, such as fully equipped tool boxes, through suppliers like Snap-on Tools who offer finance terms. You can claim tax relief on the interest element of payments made under a finance agreement providing you have all the supporting paperwork.
Institute of the Motor Industry tax rebate
If you pay for membership of the IMI yourself then you can claim the cost of this back and can be claimed at the same time as your tool tax rebate.
What happens if I change employers?
This will not affect any tax rebates due to you providing none of your employers reimburse you for any of the tools you purchase. Although employers will be aware of the tool allowance in your tax code, any other matters relating to tax and tax rebates are between you and HMRC.
Ready to claim your Mechanic’s Tax Rebate?
Capital allowance legislation, tax rebates, contacting HMRC – this all takes a lot of time and a lot of knowledge about the claim process to be successful.
Our AAT, CIMA, ATT, CTA accredited accountants are professional and fully qualified and can make sure your claim is for the maximum amount possible – usually up to almost £1000.
AMG Financial is fully regulated and has the knowledge and experience to successfully process your tool tax rebate claim quickly and professionally.