Mechanics’ finance tax relief

For over 15 years we’ve been helping mechanics claim back tax relief on the tools and equipment they buy for work. This includes expensive tool boxes which are usually bought by using finance agreements provided by tool providers like MAC tools and Snap On.

With the cost of tool boxes usually running into thousands of pounds it’s no wonder spreading the cost over a number of months is so popular.

The downside

The downside to taking out a finance agreement is that the interest charged is often hefty and usually adds on hundreds sometimes thousands of pounds to the cost of the item bought.

Here’s the good news

We’ve been successful in claiming back tax relief on the total interest charged on items bought under a finance agreement. This could be a tidy sum and is added on top of your tool tax rebate.

Finance agreement tax relief example

Gerry bought a classic 78 series roll cab from his local Snap On tool provider. It cost him £2998 to buy with the interest coming to £779 under his finance agreement.

Total interest of £779 / 40% tax rate = £311 finance tax rebate

That’s £311 on top of his tool tax rebate! Gerry has just bought another tool box under finance so he’ll be getting more tax relief on his finance interest next year.

How much is it worth

You will either get 20% or 40% of the total finance figure. The percentage you get back depends on how much you earn.

What you need to claim

All we need is a copy of your finance agreement which shows the item you have bought, the date it was purchased and the amount of interest charged. If you haven’t kept your agreements you can ask your tool provider for a copy.

Time limit

You have four tax years only to claim back any tax relief on your finance interest which is different to a claim for capital allowances for tools. If you have a finance agreement for before this period it’s too late to claim.

 

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