Thousands of workers are missing out on free money from HMRC by using a tax agent to make their claim instead of doing it themselves.
More than 800,000 taxpayers claimed tax refunds for work expenses during the 2021/22 tax year - with the average payout being £125 - but only 30% of those who claimed got the full amount back into their bank account. Tax agents claim to make getting money back from HMRC easier, but take a chunk of money - in some cases up to 50% of the value of the claim - for doing so.
The Government announced a crackdown on cheeky firms that impersonate official HMRC sites and charge hefty fees to claim tax rebates earlier this year, and now is urging workers to claim back money for 'work-related expenses' using the directly through HMRC's online portal on GOV.UK.
Read more: Ovo and Good Energy set to pay out £2.7m for overcharging customers
HMRC received more than 2,200 complaints about repayment agents between January 2022 and October 2022, and launched a consultation last year. It published the new measures, including tax rebate firms now having to register with HMRC and improve their standards so customers fully understand what they are signing up for.
The tax office is urging workers to make their own claim through the HMRC portal and says the process is "straightforward" and only takes around 15 minutes to do. You will need to Government Gateway account to make your claim and you will receive 100% of the any payment due.
Work-related expenses are things you have to pay for to enable you to do your job, for instance, uniforms, tools, travel and working from home costs. For some claims, you must keep records of what you’ve spent.
According to HMRC, you might be able to claim tax relief if:
- You use your own money for things that you must buy for your job
- You only use these things for your work
And things you can claim tax relief on can include:
- Uniforms and work clothing, including washing and repair costs
- Buying work-related equipment
- Professional fees, union memberships, and subscriptions
- Using your own vehicle for work travel, although this does not include your journey from home to work
- Some costs related to working from home
- Travel and overnight expenses
To get the cashback, you must have paid tax in the year you’re claiming for and you’ll get tax relief based on what you’ve spent and the rate at which you pay tax. You can claim for this tax year and the four previous tax years. If your claim is for a previous year, HMRC will likely send you a refund and it is for the current tax year, they may adjust your tax code so you pay less tax going forward
Victoria Atkins, financial secretary to the Treasury said: "Nobody should miss out on the full claim of a tax rebate – and by going straight to HMRC people can avoid being left out of pocket because of unscrupulous repayments agents.
"Thanks to our Spring Budget reforms if someone no longer wants an agent involved in their claim, they’ll be able to cancel it so any future rebates will go to the taxpayer in full."
Read more:
- Full list of changes in pipeline for private tenants, including new rights to keep pets and the end of 'no fault' evictions
- Families struggling to pay TV licence to get more support from BBC
- Step-by-step guide to dealing with debt in the cost of living crisis
- Little-known way to slash your water bills by up to 50% a year
- Mobile phone warning issued with millions overpaying for handsets they already own
