What do I need to claim mechanics’ tools tax back?

A tools tax rebate is available to all mechanics who buy the tools they use for work themselves, when they are not reimbursed by their employer. I

f you are applying for a flat rate allowance, then you don’t need anything; if you are submitting a capital allowances claim then you need appropriate documents (like receipts) as proof.

What is a flat rate allowance?

A flat rate allowance is the agreed amount of tax relief available to particular professionals for specific, common work expenses. For a mechanic, this is currently £120 per tax year, for which you can reclaim 20% tax.

If you spend up to £120 on your own tools, this is a great way to reclaim the tax without having to provide supporting documentation. This type of claim can be backdated for four tax years.

What if I spent more than £120?

If you have spent more than the flat rate allowance of £120, you can claim a capital allowances tools rebate. You will need to produce evidence for this type of tools tax rebate because the amount of money is larger.

It’s easy to forget about that £200 drill that you purchased at the beginning of the year but, it all counts towards your total tax relief cheque.

What evidence does HMRC need to support a mechanics’ tools tax rebate?

HMRC accepts the following as official evidence for your claim:

• Receipts – from wholesalers, hardware shops or online retailers (including eBay and Amazon)
• Activity reports – Most tools providers will happily give you a copy of your activity report, if you have not kept them
• Finance Agreements – Tool providers like Snap on and MAC often provide the option of a finance agreement for bigger orders. These finance agreements can legitimately be included along with other receipts.