Mechanics Tax Rebate Guide

Do you purchase your own work equipment and tools? If yes, you may be eligible to claim a mechanic’s tax rebate starting today.

As someone working in mechanics, you probably invest significant personal funds in work-related tools.

Whether you’ve purchased spanners, diagnostic equipment, or specialised automotive tools, you may be entitled to significant tax relief that many mechanics never realise they can claim.

HMRC allows mechanics to claim back some of the tax they have already paid through their employment to help cover the cost of their tool expenses.

Qualifying mechanics can reclaim up to 18% of what they have spent through HMRC’s capital allowances system.

This expert-reviewed guide walks you through the entire process, from determining your eligibility, the evidence you need and how to submit your claim to HMRC.

Am I eligible for a mechanic tax refund?

Eligibility starts with the fact that you’re employed as a mechanic and spend your own money on tools or equipment.

This includes apprentices, self-employed mechanics who were previously employed, and those who’ve changed employers.

Other qualifying criteria for a mechanics tax rebate includes:

• You do not receive full reimbursement from your employer for your tools.
• You can provide receipts for your purchases.
• You paid tax in the year(s) of you are claiming for.

What types of tools qualify for tax relief?

Almost any tools that are necessary for your work as a mechanic qualify for tax relief, including:

• Hand tools (wrenches, pliers, screwdrivers).
• Power tools.
• Diagnostic equipment.
• Specialty tools for specific vehicle makes/models.
• Tool storage (toolboxes, chests).
• Safety equipment related to tool use.

How much is a mechanic tax refund worth?

The exact amount depends on your tax rate and total qualifying expenses. A claim is worth about 18% of the total cost of your tool purchases and is made through the capital allowances act 2001.

The rebate is calculated based on your tax rate. For basic rate taxpayers (20%), you’ll receive 20% of the eligible tool costs back.

Higher rate taxpayers (40%) receive 40%, and additional rate taxpayers (45%) receive 45% of eligible costs.

You can use our free tool tax refund calculator will even give you a personal estimate of how much tax you can expect to get back.

Can I claim for tools purchased in previous tax years?

Yes, you can claim for tools purchased in previous tax years for as far back as you can go, as long as you have the appropriate documentation to support these historical claims.

You can submit a tool tax refund application for only the previous four tax years.

You may select when to claim capital allowances, however, if you fail to claim within the four-year timeframe, you will forfeit the opportunity to claim the 100% value of an asset in its purchase year.

Do I need receipts to make a claim?

HMRC will need you will need to have evidence to show what you have bought. This can be in the form of receipts or an activity report from your tool provider(s).

You can use receipts as evidence for as far back as you can provide them for as long as the items are still in use.

Your tool provider should be able to give you an activity report, if you ask nicely!

Do I need a letter from my employer confirming I need these tools?

While not always mandatory, a letter from your employer confirming that you require specific tools for your job and that they don’t provide them can strengthen your claim.

This is particularly helpful if you’re claiming for expensive specialist equipment.

How do I submit my mechanics tax rebate claim?

To file a claim with HMRC, you must submit either an online iForm, a P87 form or complete a self assessment tax return.

Online claims: HMRC’s online iForm can be accessed here and requires you to sign into your government gateway account before proceeding.

Postal claims: The P87 form is appropriate for tool tax relief applications under £2500 and is suitable if you don’t currently file a tax return for other purposes (such as property income).

When submitting your P87, HMRC typically requires proof of purchase receipts. It’s advisable to retain copies of any receipts posted to HMRC.

Self assessment: For tool claims exceeding £2,500 in a single tax year, filing a self assessment tax return is generally required.

HMRC will establish a self assessment account once an SA1 form is processed, enabling you to submit tax returns with your tool expenses listed in the employment portion of the return.

After submitting a tax retunr keep all records for at least five years after the submission deadline for the relevant tax year. HMRC can request evidence long after you’ve filed your claim.

Tool tax rebate timescales

On average, a tool tax rebate takes between 12 and 24 weeks to process from when you applied, assuming there are no delays at HMRC.

If you apply around peak periods (January 31st self-assessment deadline or early April tax year-end), processing may take longer.

Can I claim if my employer provides some tools but I purchase others?

Yes, you can claim for any tools you’ve personally paid for, regardless of whether your employer provides some equipment.

The rebate only applies to tools you’ve purchased with your own money and that are essential for performing your job.

Common mistakes to avoid when claiming a tool tax rebate

Common mistakes include:

• Not keeping adequate records of tool purchases.
• Missing claim deadlines.
• Claiming for tools that aren’t necessary for your job.
• Claiming for tools provided by your employer.

Can I claim for uniform and protective clothing allowance too?

Almost all mechanics will need to wash and maintain their own protective clothing. The tax office will let you claim back a set amount of £60 per tax year to cover the cost.

However, if your employer provides a facility at work to wash your protective clothing you won’t be able to claim.

Besides tools, mechanics may also claim for:

• Work-specific clothing and uniform.
• Cleaning and maintaining work clothes.
• Mileage for work-related travel (not commuting).
• Professional subscriptions and memberships.
• Training courses relevant to your work.

Our tax guides are free to use and help you find out more about other trypes of tax reliefs that might be available.

Mechanics Tax FAQ’s

Can I claim tax relief on finance payments?

Most large purchases like tool boxes are bought through a finance agreement from a tool provider like MAC tools or Snap on.

Tax relief can be reclaimed on the interest payments made through a finance agreement.

Can I claim for my Institute of the Motor Industry subscription?

If you’re a member of the IMI and pay for the membership fee out of your own pocket you can claim back a tax rebate on the annual subscription cost.

Can I claim for tool repairs as well as purchases?

Yes, you can claim tax relief on the cost of repairing your work tools, not just purchasing new ones. Keep receipts for any repair services or replacement parts.

I have changed employers … Does this matter?

No, your number of employers makes no difference to your mechanic tax rebate claim. Your tax affairs are between you and HMRC, it has no bearing on your current employer and they are not liable to make any tax rebate payments to you.

What happens if my rebate claim is denied?

If your claim is denied, review HMRC’s reason for the denial and correct any issues with your documentation.

You can appeal the decision or re-file your claim with additional supporting information.