Tax Preparation Specialist Provides Guidance to Ensure Full Eligible Tax Relief
Each year many thousands of taxpayers claim a tax refund from HMRC for their work-related expenses, but a large proportion fail to claim their entire eligible refund amount due to a lack of awareness of the full range of allowable expenses they can claim tax relief for. David Redfern, director of DSR Tax Refunds Ltd and a tax preparation specialist, has an ongoing commitment to providing tax relief awareness and provides the lowdown on what can and cannot be claimed as tax relief.
Although HMRC’s tax relief rules are intended to ensure that taxpayers are not left footing the bill for their work-related expenses, not every expense is eligible for tax relief. Redfern stated, “There are a couple of general things to note when looking at tax relief for work-related expenses, firstly that there is a difference in what is allowable depending on whether you are classed as self-employed or an employee who is taxed via PAYE – if you are self-employed, there is a wider range of potential tax relief but that doesn’t mean that there are no eligible tax relief options for employees. Secondly, there are some expenses which are considered to be the general and universal costs of living, such as home costs, food and commuting expenses, which are not eligible for tax relief – they are just the cost of living which we all have to bear”. When looking at eligible allowable expenses, whether for employees or self-employed workers, the expense must be solely incurred as a result of the performance of employment duties.
Common components of tax refund claims are travel costs, mileage and certain subsistence costs incurred while working away, However, many other eligible areas for tax relief are missed out. Redfern explained “For self-employed workers, most expenses sustained in the running of the business are eligible as long as they are wholly and exclusively business expenses, with no personal usage aspect. This means that fees for professional services such as legal advice, conveyancing or accountancy are eligible, as are costs involved with promoting and advertising your business, any admin costs, insurance fees as well as any premises or employee costs. Neglecting any of these areas can cause a real hit to your profits.” When claiming these expenses, self-employed taxpayers must ensure that they have evidence that the expense has been incurred, such as receipts or invoices. Legal fees associated with criminal activity are not allowable.
While there are fewer legitimate expenses for employees, there are still some areas which are routinely forgotten. Redfern stated “If your job requires you to hold professional membership or be a member of an approved union, these are allowable expenses for tax relief, and if you are required to wear a uniform as part of your job, you are entitled to a flat-rate allowance to cover the costs incurred in laundering or repairing that uniform. Similarly, if you are required to work from home as a result of the Covid19 pandemic, even if it is just for one day, you are entitled to claim a flat-rate allowance for the whole tax year to cover any additional costs which working from home may bring, such as additional energy costs”. Where an employee has incurred these expenses in previous years but has not claimed the tax relief, eligible claims can be backdated for up to four years.
There is no need to wait until the end of the tax year to make a tax refund claim. Refund claims are processed throughout the tax year. Employees and self-employed workers, especially construction workers who work under the CIS scheme, are encouraged to contact DSR Tax Refunds Ltd to begin their tax refund claim as soon as possible. They can be contacted on 0115 795 0232 or through their website, which contains an extensive rage of resources relating not only to tax refunds but to many other areas of tax information.
About DSR Tax Refunds Ltd
DSR Tax Refunds Ltd is a firm of tax preparation experts who specialise in CIS tax returns for construction workers working within the Construction Industry Scheme (CIS) as well as employees who are eligible to claim a tax refund for their work-related expenses, including employees working from home as a result of the Covid19 pandemic. Their friendly and helpful team can help with all relevant paperwork to ensure clients claims are handled in an accurate and efficient manner.
For more about DSR Tax Refunds Ltd, visit https://tax-refunds.co.uk/
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DSR Tax Refunds Ltd
Registered Office: Ground Floor, Seven Mile House, 1 Mansfield Road, Papplewick, Nottingham, NG15 8FJ