How far back can I claim a tool tax rebate?

The answer to this question is really positive.

If you are claiming back capital allowances for the actual cost of your tools there is no HMRC limit to how far back you can claim a tool tax rebate, as long as you meet two main criteria:

• You must still be using the item in question. You can’t claim for anything that you bought, but has long since hit the scrap heap.
• You must also be able to prove that you bought it. That means having a receipt or activity report from your tool provider for each individual tool you are claiming for.

There is even the possibility for claiming tax relief on tools that you already owned, but then started to use for work and those tools you have received as a gift. Tax relief can be claimed on these items at their resale value, rather than the purchase price.

HMRC have also made provision for those items that have a dual purpose. For example, if you work part time as a mechanic and also work on your own vintage car as a hobby. Say that’s around a 50/50 split, time wise. Half of the tool’s time is spent on work, half on your baby in the garage at home.

So, you can claim the respective proportion of the cost, related to how much time it is being used for work purposes. Just because it is being used at home and work, it is not disqualified. You just adjust your claim figures accordingly to account for the different amounts of time.

Keeping your receipts is important

The key to this kind of tool tax rebate claim is retaining all your paperwork. From old receipts in a shoebox, to digital records; HMRC accepts all forms of receipt and activity report evidence. If you are new into the trade, get into the good habit of photographing or storing all of your proofs of purchase now.

Sometimes very obliging companies (the likes of MAC Tools and Snap On) with excellent customer service will re-send you copies of activity reports, if this information is suddenly spurring you into action. Just ask politely.

Can I claim a tool tax rebate if my tools are second hand?

Yes, you can claim a tool tax rebate if your tools are second hand, as long as you have a receipt or invoice to show proof of purchase. So many of us are finding the best value deals through online bidding websites these days.

And it is possible to buy literally anything online with the likes of Ebay; including the full range of tools essential for mechanics and auto technicians. It’s a fairly safe assumption that this is now the first port of call for auto technicians and mechanics, rather than the old classified ads.

Second hand tools often represent good value for money for mechanics, particularly those at the start of their careers. The really useful thing for mechanics purchasing second hand tools online, is that there is proof of purchase – as long as you remember to add it to your records.

Sometimes this can be trickier when buying from an individual you know. People don’t usually have receipt books lying around for the odd impromptu sale of tools they no longer require. But HMRC do sometimes allow other forms of evidence as proof of purchase, like a cheque book stub for example. Therefore, making the second hand tool purchase able to be included in a tool tax rebate claim.