Accountancy Solutions

As a worker and tax payer under the thumb of the UK governmental tax system there is a great deal of information to learn to help one be sure they are getting their proper dues from the HMRC. Many tax payers are not fully aware that many of their day-to-day expenditures can be written off on their taxes and lead to rebates and lower tax rates for future years. Proper Accountancy and knowledge of tax laws is key to this, as well as a basic understanding of the history and principles behind the tax system in the UK. There is much to learn besides these brief snippets of the complicated tax codes and history in the UK, but this little overview can hopefully give you an idea of your place inside the system, with many companies able to help you get various forms for rebates like uniform tax rebate from HMRC.

There’s three major areas of the government you are paying your taxes to, these are Her Majesty’s Revenue and Customs (HMRC), the national governments, and your local governments. The HMRC is by far the biggest contributor to the tax pool due to all income tax, national insurance payments, value added tax, and fuel taxes going towards it. The other two subsist mainly from on-street parking fees, grants from the HMRC, and other minor taxes. Most tax-paying citizens do not need to worry about this, however, as the Pay As You Earn (PAYE) system as simplified this process over the past few decades.

The PAYE system’s roots started during WWII and the need for less complicated tax measures to save money, but at the same time ensuring satisfactory tax rates. Beyond this need this era of UK saw a huge boom in the UK tax paying populous with over 2,000,000 new tax payers introduced into the economy, many of which had never been responsible for taxes in their entire lives. Winston Churchill saw trouble on the horizon with the ongoing war and a populous that was not prepared for the complexities of the old tax systems, so in 1941 Churchill’s chancellor, Sir Kingsley Wood, headed this project with these goals in mind, simplification and efficiency. The PAYE system has largely been successful, simplifying most forms of labor into different tax brackets and codes that allows for a simplified and reasonable taxation based on what your employer reports to the government in their and your money is withheld correspondingly. However, due to the near automation of this system there are certain issues that do arise if your work life is not entirely within the “norm”.

Self Assessment and Uniform Tax Rebate from HMRC

One of these commonly overlooked areas in the PAYE system is the P87 form. Although the PAYE system has for the most part made a lot of tax refunds redundant, there are many exceptions to this rule especially for employees who are paying out of pocket for equipment, maintenance, and other expenses that are required for your work life but are not compensated by the employer. For instance, a common question asked is are work uniforms tax deductible? Claiming Uniform Tax Rebate by allows the tax payer to receive a tax refund based on the maintenance of any work related uniforms that they must take care of on their own. This includes anything from a simple branded t-shirt to the uniform of a Police Officer or Doctor, meaning a very broad category of refunds that are completely under-utilized by the average tax paying worker in the UK. Make note for this particular relief you can only file as far back as the last four years you have been wearing the uniform, and your tax code should in the future correspond with this rebate meaning you will not have to file again.

TAXIf you’re traveling in your own vehicle and paying your own expenses on said vehicle without filing for government relief then let us introduce you to the Approved Mileage Allowance Payment (AMAP) relief. This tax relief is based around helping alleviate wear and tear and gasoline expenses incurred upon employees who must travel for business. The amount of relief depends on the amount of mileage expended, one rate for the first 10,000 miles and another for any after that initial 10,000. Accounting for the mileage here is important, as travel to and from work is not included, and many use a GPS app of some kind on their smart phones to keep track of miles expended during their work hours.

These ideas are simple enough and are included in the previously mentioned P87 forms which are available to be filled and filed from the HMRC website, however if you are selling goods and services or trading on your own, or have started a limited company you are considered self-employed in the UK which falls outside the jurisdiction of the PAYE system. Everyone in these categories are somewhat unique and must file their taxes appropriately or be fined and interest incurred upon if discovered by the HMRC. The key is to register as self-employed to the HMRC and keep accurate records of all business income and expenditures, after filing the HMRC will bill you on your taxes usually in 2 payments out of the year.

The HMRC recommended a litany of Accounting software and firms on their website for good reason, to ensure proper fairness in taxation for both the government and the tax-payer. Being inaccurate with your accounting here has two main consequences, the first and most likely being that you will not receive your full tax rebate and be responsible for more taxes than you rightfully owe. The other being that if you have accidentally filed fraudulently the HMRC will put fees and interest on any owed money towards them until fully payed off. The help of professionals and websites are key to ensuring the proper tax bracket for yourself, many specializing in basic P87 filings like the mentioned Uniform Tax Rebates and the AMAP relief but also many for full taxation help for the self-employed and business owners. Simplifying the process into the hands of professionals or professionally built software can lead you to surprise rebates that you may have never thought you were eligible for as well, relieving the burden of taxation that much more.