Tax Rebate Accountancy Solutions from London Accountants
To the working class citizens of the UK, are you sure you’re paying correctly in your taxes? That is, are you sure that the HMRC doesn’t owe you anything on your next tax year? “But the PAYE system!” you may say. Well, yes, it’s a good system and all that but in many more cases than you would think it doesn’t fully take into consideration the expenditures and other costs incurred by the common working man, causing you to be over paying every year on your taxes. What can you do about this, then? Well, a good place to start is getting yourself a basic understanding of Accountancy and Taxation laws here in the UK.
First off, let’s take a look at where your money is going. There’s three main branches of taxation within the UK. These are the central government (HMRC), the devolved national governments, and the local governments. The vast majority of tax income comes from the income tax, national insurance, value added tax, and the fuel tax most of which ended up in the hands of the HMRC. The other two gain most of their income by minor local taxations, on street parking fees, and grants given to them from the central government itself. To deal with the complexities of such a vast system that works on multiple levels of the government, the process was simplified for the tax payer with the introduction of the Pay As You Earn (PAYE) system.
Now, this PAYE system came about during WWII for two main reasons. First off, we had a huge number of new tax payers jumping into the economy during the war efforts, nearly 2,000,000, who were completely oblivious to tax paying. Secondly, the old tax system demanded resources from the government they simply didn’t have during the war and they needed a solid source of tax revenue to continue the fight. Churchill’s chancellor, Sir Kingsley Wood, stepped in during this time and proposed what we now know as the PAYE system. The PAYE system is simplicity, all workers are grouped into certain tax brackets and tax codes and are taxed based solely off this. Once granted their tax code the money is taken from the worker throughout the year as they work, AKA Pay As You Earn, and resolves the hassle of the end of the year taxation SNAFUs that plagued the country at this time. The one caveat to all this is with all the simplicity came a lock of personalization and intricacy that allowed the tax payer to be sure they were solidly paying the correct taxes and getting the right amount back. This has created a system where many are over-paying on their taxes, without even knowing so.
The main example of this shows up in the often mentioned P87 forms. These forms encompass a litany of tax rebated to be filed by an employee with proper accountancy records and can allow them to receive rather substantial rebates and tax breaks in their tax years. If you purchased equipment for your job, and use them solely for that purpose, then you can get a tax break on it. If you travel overseas and require a visa and vaccinations to be purchased by you, then there’s a tax break for it. Union Fees, compulsory subscriptions, or any groups you must pay membership dues into to aptly do your job can be added to this form.
Uniform Tax Refund from HMR&C
An extremely common one that is overlooked is the Uniform Tax Rebate which can encapsulate just about any career path from retail employee to janitor to airline attendant, anyone who has to perform maintenance on their own uniform without compensation from their employer can receive a tax rebate guide just for this, few companies like uniform tax refund and us provide this service for a nominal charge. This particular relief only needs to be claimed once, and the tax code will update for future years but can be claimed up to the past four years of wearing that particular uniform allowing a sizeable one time rebate and a future tax code of lower cost.
The Approved Mileage Allowance Payment (AMAP) relief is also available on the P87 form, and is quite useful for workers who must travel for business with their own vehicle they must maintain. This relief is in place to alleviate some of the burden vehicular travel can have, monetarily speaking, and is a nearly essential tool in the arsenal of the savvy driving employees tax records. There are two categories for the AMAP relief, the first 10,000 miles and anything after those 10,000 miles. Meaning this is a relief that is important to be accurate on, diligent notes or GPS software are recommended to take full advantage of the tax break available here.
Though the PAYE system has simplified the tax paying process for the vast majority of tax-paying citizens, there still exists those that are self-employed and business owners. Things are infinitely more complicate on their end, and accurate accountancy and record keeping are a must. If you are selling goods on your own, trading, or have started your own limited company then fully detailed reports of all business incomes and expenditures are a must to ensure proper taxation at the end of the year. Diligence is key here, and just like in the PAYE system there are many rebates available to you.
There are a plethora of Accounting software and firms designed to help those who wish to simply take full advantage of their P87’s to those who need help with an entire business’s worth of accounting and record keeping. The HMRC even recommends certain ones, as being inaccurate in your record keeping can lead to consequences. The first main consequence, and the most likely, is that you will simply over pay on your taxes, losing money for yourself or your business without anyone knowing the wiser. The other, more damaging consequence, is that you underreport and are then fined and charged interest by the HMRC. Be sure to maintain accurate accountancy to ensure both of these problems are a thing of past worries for yourself.