Tax refunds, or tax rebates as they are commonly called, do what they say: getting money back from HMRC when you pay more tax than you should. With cash flow being vitally important to small businesses, it is important to know your tax liability and never overpay in tax, where possible.

We look at certain situations where you may also be able to claim back tax, whether your a freelancer or small business owner, these are the main types of tax refunds available to you.

PAYE

As a director of a limited company and you pay yourself a salary and/or dividends via Pay As You Earn (PAYE), it is quite common to overpay in tax.

This may be due to being given an incorrect PAYE code or perhaps an emergency tax code, for example, when starting a new job.

The good news here is that if you have overpaid in tax in a given tax year, HMRC will proactively contact you and advise you, via a P800 form.  These are usually sent out after the tax year in question, sometime between June and September.

The P800 form will advise you to claim back tax via the Gov.uk site, and the money is then sent directly to your bank account in a few days. Or you can opt to receive a cheque, but this takes longer.

You can also check if you have overpaid in tax via your via your Personal Tax Account or business tax account. Alternatively, you can call HMRC’s Self Assessment helpline.

Vehicles

If you use your car for work, you can often claim a tax refund. As part of our tax advice service, we provide details about where you can make savings, and vehicles are often an important area.

For example, you might be able to claim back money when you use a vehicle to visit clients or travel to other offices. This does not, however, cover trips from your home to your permanent place of work, and it only applies to business travel.

Uniforms

If you wear a uniform as part of your job, and that does not only include police, firefighters or healthcare workers, this could also relate to branded company clothes, some of the cost to clean or even buy the uniform may be able to be claimed for.

If the uniform is perceived as being an essential part of your job, there is a good chance that a tax claim can be made.

Equipment

Just as you might have to look after your uniform, you may also use equipment as part of your job, which your employer does not provide for you.  For example, this include buying your own tools and maintaining them.  Like uniforms, if the equipment is perceived as being an essential part of your job, you may be able to make a tax claim on the cost associated with the equipment.

Don’t Overpay Your Tax

These are some of the most common types of tax refunds that you might experience, and it is important to keep these costs in mind and where you can save cash or not overpay in tax.

We can help

Whether these apply to you or not, paying too much tax is never a good idea. Whether you are an individual, freelancer, contractor or you run a small business, we can help to minimise your tax burden with our tax planning and tax advice services. That way, you can ensure you are only paying what you should be and nothing more.

We strongly recommend you speak with a tax and accounting specialist like Mirandus Accountants, who can provide expert advice for your business and personal tax planning needs.

We are an accounting company in London and Edinburgh who are tax accountants for the self-employed and offer accountant services for small business. You can contact us for a tailored solution to your unique business circumstances.