Many travel agents could be due a tax rebate due to lack of earnings. Tommy McNally, founder of TommysTax.com, explains how agents can go about claiming their tax refund
With the travel industry so hard hit by the pandemic there is a good chance that you’ve overpaid on your tax and are due a refund. Our clients are getting, on average, £3,000 refunded this year. So how do you find out if you’ve overpaid on tax and how do you claim it back?
Tax is calculated on your estimated earnings for the year ending 1 April, divided into 12. If you were made redundant over the past year, or have a lower income than anticipated, then you’ve probably earned less than HMRC has taxed you on.
There is also a good chance that your claimable expenses have increased, particularly if you’ve been working from home. Below are some tips to find out whether you’ve overpaid tax and what expenses are claimable against tax.
Get your 2020 P60 or your last payslip (March 2020) and note down your total income (YTD) and what you’ve paid in tax. Ignore deductions like pensions, national insurance and student debt repayments – for the purposes of this you need to only review the tax.
HMRC will probably automatically give you a tax refund next year but won’t automatically give you a tax refund on your expenses, plus most people need the money now. If that’s you, either employ someone to claim it back for you or get in contact with HMRC yourself.
To claim it yourself, visit www.gov.uk/claim-tax-refund and the site will take you through a series of questions. Unhelpfully the form has a “one size fits” all approach so covers all tax refunds claims, not just income tax.
If you’re finding it difficult, get professional help. It could save you thousands in either a fine or a missed refund.