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Job Expenses - Tax Credits



Well, working from home for over 4 years now (well, 5.5 really), I have been claiming tax credits for job expenses.

You see, this is all legitimate, as I have a room dedicated to my work, so by law, I can claim tax credits for such expenses.

When we used to live in rented accomodation, we used to get tax credits for 1/5 of our rental (1 room out of 5 dedicated to work), for 1/5 of council tax, gas and electric. At the time, that is quite handy, and gave something decent in terms of credit (I think an extra £20 per month).

Anyway, moved into our new house in 2005, and after informing the HMRC of my changes (and that I was now only claiming for Council Tax, Gas and Electric (Claiming on our mortgage meant getting involved in capitol gains tax :yahoo: )).

Anyhow, after sorting it all out for 2006/2007 tax, they informed me that actually, I had been claiming incorrectly.

First of all, for 06/07 tax year, what I could claim on job expenses was reduced (I cant remember what, but it was something of a chunk). In fact, it was true for 05/06 (maybe other years too), but I refused to pay for previous years. Why? Simple really. I had been in contact with the HMRC, for a couple of years, trying to sort out my tax code (there was never any major money involved), but every year, I was oweing tax, and it was coming out of my salary). Because I had been in contact, and they had not informed me of the changes (as well as going through calculations with them anyway), they were at fault.

Secondly, they informed me that as I have a joint bank account (after discussing previous isses etc), that I could actually only claim half of the job expenses :drinks: In fact, because we had a bank account going back for a while, all my claimed job expenses were subsequently halved (from previous years), and the other half was then used as unpaid tax for tax year 06/07 :blush:

To claim the other half of job expenses, my wife would have to claim too. Stupid, aint it?!

Anyway, after speaking to the HMRC some many months ago, they assured me that my 07/08 tax code calculations should not include any unpaid taxes, as this should now have been sorted and finalised in my 06/07 calculations (I've owed tax for a number of years now, so they better be right).

The funny thing is, as I claim this job expenses tax credit, I also have to fill in a form every year (self assesment or something like that). So as my new tax code arrived for 07/08, I thought, I wonder how much I get for filling in this form.

I couldnt believe it :yahoo:£2 per month :yahoo: Absolutely unbelievable.

I've now told them that I want it taken out of my tax calculations for 07/08 (although still spplicable), as my time is worth more than £2 per month. I expect a tax investigation some time soon :yahoo:


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