Taxes are typically overcomplicated and not straightforward. However, you must understand taxes to save money and time. When you are self-employed, you may not have the time to research various tax rebates in the United Kingdom. I’ve come to help you. Here is a basic guide on UK tax rebates. 

A Basic Guide on UK Tax Rebates: Save Money on Taxes

The world is more global than it has ever been before. I’m a firm believer that we will only become more interconnected over time. Anyone that wants to think that we (as people and countries) need to be isolated is thinking in pre-historic times. If you can save money on retirement fees, your daily expenses and your debts, you will end up in great shape financially.

In my Blogger Interview Series, I talked about many of the different financial habits of top money bloggers and not one of them mentioned taxes. Thus, I thought I would share an overview on UK tax rebates. I did this as a way to step outside my bounds and help others with the nuances of UK tax rebates for the self employed.

Tax rebates can really save you a lot of money if you’re self-employed or an employee – here is some insight on tax rebates in the United Kingdom.

UK Tax Rebates: Self-Employed And Not Claiming All Rebates

Taxpayers are able to complete their tax returns with relative ease online thanks to the system in place by HMRC.  All of the calculations will be done for you and the forms have been tailored to your particular situation.  The problem is that the system still relies on you having some knowledge on what you should be claiming.

There are a number of common areas of expense which are overlooked by most self-employed individuals.  These include home internet costs, mileage costs, the use of home as an office, pre-trading expenditure and capital allowances on equipment. If you are an online entrepreneur, these expenses are very important for you to claim as a tax rebate.

Left Employment Through The Year

There are times when people have been working for part of the tax year in normal employment and left part way through the year either voluntarily or involuntarily.  If you are in this situation, it is very likely that part of your annual personal tax-free allowance has not been used and you will be due a refund.  An example of this will be someone who has been working and paying their tax until October when they left employment.

This person would have over £5000 of unused allowance if they did not receive any other income for the rest of the year. This unused allowance will generate a possible tax refund of up to £2000.

Working Within The CIS Industry

If you are not aware of the CIS industry, this is the process which was set up by HMRC to oversee the tax collection from workers in the construction industry.  CIS stands for the Construction Industry Scheme.  The scheme works by HMRC telling all contractors to deduct 20% from payments to self-employed sub-contractors.

However, it is important to note that these deductions are generally more than is required in 99% of cases.  This means that the average worker will be due an annual return of around £2500.  It is possible to find out more about the CIS tax rebate online. Here is some information from Tax Returned.

Subscription Costs

If you are a professional worker who has a qualification, you may need to have a professional subscription as well.  Examples of this will be the tax purposes police federation for policemen, gas safety register subscription costs, trade memberships and SIA license fees for security workers.

Some of these subscription fees may be reimbursed by your employer, but there are times when you have to pay for these fees yourself.  In these cases, you will most likely be due a tax rebate in the United Kingdom.

Starting Self Employment

If you are just starting out in self-employment, you might find that your opening years of trading have made a loss.  This is actually very common. Businesses will take a while to establish a good reputation and build their brand.  However, while you wait for this, you could be investing in equipment, advertising, tools and machinery which are related to building up your business.

In these cases, there is a special tax rebate which can be used where the losses from the first 4 years of trading can be used against previous income.  This will generally result in a repayment.  An example of this will be a £10000 loss in year 1 which was carried back against other taxable income resulting in a repayment of £2000.

Unused Marriage Allowance

One of the new rebates offered by HMRC is the Marriage Allowance, but you do not actually need to be married for this. You will also be able to claim this allowance if you are in a civil relationship and living with your partner.

The allowance can be used when one individual in has unused personal allowances while the other party has used all of their allowances.  An example of this will be one partner who works part-time or is a stay at home parent while their partner is working full-time.  The partner with the unused allowance could transfer £1150 of their allowance to their partner.

This will have the potential of generating a rebate of £230 for any basic rate taxpayer and should not be overlooked.  It is important to note that the Marriage Allowance has been in place since April 2015.  If you have not claimed this allowance, you will be able to claim for 2 tax years which could generate a potential rebate of £460.

When using this rebate, you should not confuse it with the Married Couples Allowance which is an older version, but still exists.  This only applies when one of the partners in the relationship was born before 6 April 1935.  So, as you can see it will cover people for as long as their working lives in almost all cases.

Accommodation Costs

When you are working for an employer, you might have to work in a location which requires you to stay away from home overnight.  If your employer does not reimburse you for these travel expenses, you may be able to claim a tax rebate. This can end up being a relatively lucrative way to get some of your tax back if you work away from home on a regular basis. This is one relatively unknown UK tax rebate.

Other Income Taxed At Source

There are some people who have more than one source of income such as a pension.  The problem is that it is common for pension companies and HMRC to get a bit mixed up.  This means that the incorrect amount of tax will be taken off your additional source of income.  The problem with these errors is the fact that they rarely fix themselves and you will need to make a manual claim.

All of these things are going to help you save some money through the power of tax rebates. Remember that every little helps and as such you should keep your ear to the ground to get as many rebates as you can, as often as you can. This UK tax rebate is clearly one followed by millionaires.

Conclusion on UK Tax Rebates

Tax rebates for the self-employed are huge. You need to ensure that you are saving every single dollar where possible. There are simply too many people that are completely unaware of these various UK tax rebates. Consider one of these best ppi claim companies.

I hope these tips on the various United Kingdom tax rebates proved valuable to you. Tax rebates are a great way to reduce your tax liabilities. When you are self-employed, sometimes it’s hard to manage your time and focus on taxes.

Here are some ways to manage your online jobs. Tax implications from flipping sneakers is a lot different than taxes from a business.

What other UK tax rebates are you aware of? Please let us know in the comments below. We’d love to hear from you! Contact me with any further question or inquiries.

See Also:

• VAT Reclaim Overview: Get All of Your Money Back

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