Tax efficiency
It struck me recently how many people don’t claim tax back on their professional fees etc because they think this can be an onerous task, then at graduation talking to some of our new graduates I was introduced to a dispensing optician’s partner who happened to be a tax manager in an accountancy firm and she explained how easy this can be.
There are currently three tax effective things many of us could do easily to reduce our tax bill.
- Change your tax code to reclaim the tax on your ABDO fees and GOC fees.
- If your employer provides you with a uniform and expects you to keep it clean you can claim £60 a year for doing this
- If you have needed to work from home over the last two years you can claim £312 back from your tax
- Employed individuals can claim tax relief on expenses they incur personally, if such expenses are required for them to do their job, for example, professional fees and subscriptions. An individual can apply to have their current tax code changed to include relief for these expenses and can also make backdated claims for the previous four tax years (backdated claims result in repayments!). This link is a great place to start – Claim tax relief for your job expenses – GOV.UK (www.gov.uk).
All you need is a Government Gateway and personal tax account (anybody can have these, and they are very easy to set up). The click ‘Check if you can claim’ which is within the above link and follow the step-by-step instructions to claim.
If an individual is within self-assessment, such expenses should be claimed via there tax return (or overpayment relief claims) instead of the above and they should ask their accountant / tax adviser for assistance. A claim cannot be made if the expenses have been reimbursed.
*Advice from a suitability qualified professional should be sought, where required.
- Employed individuals that are required to wear a uniform, can also claim tax relief on a flat rate of £60 per tax year if they are required to maintain and launder their own uniform. Please find further information and the definition of a uniform here – Check if you can claim flat rate expenses for uniforms, work clothing and tools – GOV.UK (www.gov.uk). A claim cannot be made if the expenses have been reimbursed.
*Advice from a suitability qualified professional should be sought, where required.
- Typically, a claim can only be made for actual time spent working from home and very strict records must be kept, but this is not the case for the two above tax years. For the 2020/2021 (6 April 2020 – 5 April 2021) and 2021/2022 (6 April 2021 – 5 April 2022) tax years, as part of the Government’s COVID-19 support measures, where an employed individual has been required, by their employer, to work from home on at least one occasion during either tax year, a working from home allowance claim can be made for the entire tax year and tax relief can be claimed on £312 per year (£6 per week) – Claim tax relief for your job expenses: Working from home – GOV.UK (www.gov.uk).
Please note, the individual must have been required to work from home, not worked from home by choice.
If an individual is within self-assessment, this claim must be made via their tax return instead of the above and they should ask their accountant / tax adviser for assistance.
A claim cannot be made if the expenses have been reimbursed.
*Advice from a suitability qualified professional should be sought, where required.