In this guide, we’ll explain exactly how tool tax rebates work, who is eligible, what costs you can claim for, and how to apply during the 2024/25 tax year. If you still have any unanswered questions — especially about work-related expenses — our team is here to help.
What Is a Tool Tax Rebate?
A tool tax rebate is a refund from HMRC for the money you’ve spent on tools needed for your job. If you’re required to purchase, replace, or maintain your own tools for work, and you’ve paid for them out of your own pocket, the government considers that a legitimate expense.As long as your employer hasn’t already reimbursed you for those costs, you may be able to claim tax relief on them. For example, a mechanic tool tax rebate can help recover some of the hundreds of pounds spent on specialist gear each year. The same principle applies across many trades and professions, from carpenters and joiners who invest in their own woodworking tools to chefs who purchase their own knives and kitchen equipment.
Who Can Claim a Tool Tax Rebate?
Not everyone with a toolbox is automatically eligible, but if you meet the right criteria, HMRC could owe you a tidy sum of money. You can claim if:- You’re employed (PAYE), not self-employed, and need tools to carry out your work
- You’ve bought, replaced, or maintained tools essential to your job
- You paid for the tools yourself and haven’t been fully reimbursed by your employer
- Your job requires you to provide your own equipment as part of your contract or trade.
If you tick these boxes, you could be in line for a mechanic tool tax rebate or a similar rebate, depending on your profession. Please note that different rules apply to sole traders, such as self-employed mechanics, carpenters and chefs. If that’s you, feel free to reach out; we’re happy to walk you through what applies in your case. Please get in touch to find out more.
What Kind of Tools Can You Claim For?
If your job requires you to buy and maintain tools of the trade, you could be eligible for a tool tax rebate. It doesn’t matter what industry you’re in — it’s all about the tools you need to do that job. For example, if you’re a mechanic and you’ve paid for torque wrenches, diagnostic kits, spanner sets, or air compressors, those costs could be claimable. The same goes for carpenters and chefs, or any other worker who needs specific tools to get the job done. There are two main types of tool-related claims:-
- 1. Flat Rate Expenses (FRE) Flat rate expenses let you claim a fixed amount each year for tools (or uniforms and clothing) needed for your job — no receipts required. HMRC sets these by trade, where mechanics, carpenters and chefs are amongst those expressly recognised. For example, motor mechanics in garage repair shops can claim £120 per year. But even if your role is not shown on HMRC’s list of industries and jobs, you can still claim a flat rate expense amount of £60 a year.
- 2. Capital Allowances If you’ve bought specific tools that aren’t covered by the flat rate — say, a high-end diagnostic scanner or specialised engine equipment — you might be able to claim additional tax relief under capital allowances. Here, you’ll need to provide receipts and proof of purchase to be able to claim. It’s a lot more paperwork-heavy, but worth it for those bigger buys.
How Much Tool Tax Rebate Will I Get?
So, how much could you actually pocket from a tool tax rebate?
The tax relief works by reducing your taxable income, which means you’ll pay less tax overall. For example, if you claim a flat rate expense of £120 and you’re a basic rate taxpayer (20%), you’ll save £24 in tax for that year. Okay, it’s not huge, but if this is your first time claiming, you can usually backdate it for up to four years, getting up to £96 back.
Significantly higher rebates may be available if you’re claiming for expensive tools under capital allowances, especially if you’ve been covering the cost of those tools out of your own pocket for several years. Just keep in mind: if your employer has already contributed towards your tools, clothing, or uniform, you’ll need to subtract that amount from your claim.
How to Make a Tool Tax Rebate Claim
You can file a tool tax rebate yourself, but getting help can save you time, hassle, and boost your chances of claiming everything you’re entitled to.
Option 1: Let the pros take care of it
If you want the easiest route (and the biggest possible rebate), Swift Refunds specialises in tool tax claims. We’ll check your eligibility, help you gather the right documents, and submit everything on your behalf. No stress, no guesswork — just your rebate landing in your account.
Option 2: DIY, if you’re feeling confident
Prefer to do it yourself? You can submit your claim directly through HMRC’s website. For flat-rate expenses, use the P87 form. If you’re claiming under capital allowances for specific tools, include them in your self-assessment tax return. To claim a tool tax rebate, you’ll need your employer’s details, a list of what you’re claiming, and receipts (for capital allowance claims).
Either way, it’s worth taking action, especially if you’ve never claimed before.
Don’t Miss Out on What You’re Owed
If you’re spending your own money on the tools you need to do your job, HMRC gives you a way to claw some of that back. And with the cost of living still climbing in the 2024/25 tax year, it’s more important than ever to make sure you’re not leaving cash on the table.
Whether you go it alone or get support from Swift Refunds, the key is to claim what you’re entitled to. You’ve already paid for the tools — don’t pay more tax than you need to as well.
