Roofing Contractors – Claiming Cash Back Guide
HM Revenue and Customs (HMRC – that’s the taxman to me and you) is encouraging construction workers who pay to replace or repair their work equipment to check to see if they can claim cash back. Roofing contractors are often self-employed in the UK which means that they are responsible for self-assessment and paying their income tax. This means that you can also offset some of your expenditure against tax, reducing your taxable income by deducting certain work expenses from it.
When it comes to allowable expenses, there is plenty of guidance from HMRC and some of this is industry-specific. As a roofing contractor, you should check to see if you’re able to claim cash back on the replacement or repair of items like hard hats, boots and small tools, all of which will be used daily and subject to a high level of wear and tear.
Roofing contractors who are paid through Pay As You Earn (PAYE) could claim the full amount of tax relief directly from HMRC. If eligible, you can log into your Personal Tax Account to claim tax relief online and, if the claim is approved, you could be paid in as little as three weeks.
Tax relief is not available for all employment expenses so HMRC has launched a handy tool to help – it’s called Check If You Can Claim. Using the tool will reassure you that your claim will be approved and that your full tax relief will subsequently be paid direct into your bank account, simplifying the process.
Most claims made are for repairing or replacing tools, industry specific work clothing, professional subscriptions and mileage. The construction industry, including the roofing sector, is one of the top occupations to claim from HMRC. Expenses that are eligible for tax relief include:
- Repairing or replacing small tools that are essential to do your job (for example an electric drill, cutting equipment, nail guns, etc.)
- Cleaning, repairing or replacing specialist clothing (for example safety boots, hard hats, and tool belts).
- Business mileage (this doesn’t include commuting).
- Travel and overnight expenses (which is handy if you’re undertaking short duration work in a location that’s a little too far to travel to on a daily basis).
- Professional fees and subscription (such as trade organisation membership).
Nowadays, you’re likely to be better off financially as a contractor than you would be as an employee. This is because contractors can charge more than employees and they take home more of their pay than employees do. Contractors charge more because they have to due to the risks associated with not being in a secure, full time job and they also have overheads associated with work to pay. These overheads include insurance, income protection, critical illness, unpaid holidays and sickness downtime. The reality is that if you manage your contracting career sensibly and keep yourself in work, the rewards are greater than those enjoyed by a permanent employee.