Tax rebates for agency workers

When you work through an agency, a lot of the time you won’t be eligible for tax refunds for things like your work travel costs. However, being an “agency worker” can mean a few quite different things, so it’s worth getting a bit more specific before you give up on the idea of a tax rebate.

HMRC loves getting into tiny details like this, but the taxman doesn’t always speak the same language as normal people. So, for example, if you get a job from an employment agency, you might call yourself an agency worker. However, according to HMRC’s dictionary, you’re not. To qualify as an agency worker in the taxman’s eyes, an agency has to be “supplying” you to a client business or “end user”. You’re doing the work for this end user, whoever they are, but you’re actually working for the agency itself.

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Agency workers tax rebatesAm I an agency worker?

So far so complicated, right? If you want to get technical about it (and HMRC always wants to get technical about things), an agency worker is someone who agrees to be “supplied” to an agency’s clients for a set amount of time. When you sign up to work this way, each of these short-term assignments is treated as a separate “employment” by HMRC. So, you’re an agency worker if:

You’ve got a contract with an agency.
You only work for the end user on a temporary basis.
The end user’s in charge of the work you do.
You’re employed by the agency and paid PAYE, rather than working for yourself and filing Self Assessment tax returns.

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Agency Worker Tax RefundsWhy can't people working through agencies or employment intermediaries claim tax back for their expenses?

Here’s where things get sticky. To claim a tax rebate for essential work expenses like travel, your workplace has to count as “temporary”. That means you need to be working there for under 24 months on the trot. When you work through an agency, each of your assignments is basically treated as a separate job. If your assignment only has a single workplace you’re travelling to, then that workplace will be considered permanent even if you’re only working there for a short time. That means the temporary workplace rules won’t apply to you and you won’t be able to claim any travel tax back.

The story doesn’t end there, though. Not every assignment you’re sent on will necessarily only have a single workplace attached. You could easily find yourself working at 2 or more sites during a single work day. At that point, your situation changes. HMRC wants to give you tax back when you travel for your work, not just to it. When you travel between separate workplaces during a single day, for instance, you could well have a tax refund claim to make.

The rules around tax refunds for agency workers can get very tricky. Everybody’s individual situation varies, so just because you know someone who works roughly the same way, that doesn’t mean you can’t claim if they can’t. The best way to find out where you stand is to talk to RIFT. It won’t cost you a penny to find out if HMRC owes you money. If it does, we can make sure you always get back what you’re entitled to.

Agency worker tax refundsHow RIFT helps agency workers

Qualifying for a travel tax refund all comes down to the type of contract you’ve got with the agency you use, along with the kinds of travel you’re doing. The first thing RIFT can do for you is work out if you’re really an “agency worker” in the first place. Whichever way that works out, we can explain exactly what it all means for you and your tax. If you’re due a refund for essential work expenses like travel, we’ll get the money back in your pocket.

If you’re still not sure where you stand, just talk us through your work situation and we’ll explain everything you need to know. Even if the rules don’t let you claim a tax rebate, there’s still plenty RIFT can do to help. If you’re self-employed, for example, we can take care of your Self Assessment tax returns for you. If you’re in the building trade we can sort out your CIS paperwork so you never get stung by the taxman. Every step of the way, RIFT puts money back in your hands and keeps you in HMRC’s good books.

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FuelWhat is tax relief on fuel?

When you travel as a core part of your work (as opposed to simply travelling to a permanent workplace like an office), HMRC lets you claim back some of the tax you paid on your mileage. This tax relief is partly for the fuel you burned along the way, and partly for the general upkeep of the vehicle you’re using.

Only your actual work mileage will count toward your tax rebate amount, so any personal use you’re getting from the vehicle won’t earn you any tax back. Also, there are a few strange wrinkles in the rules that can easily trip people up. For instance, if you travel to a variety of temporary workplaces within the same area with very little difference in your daily mileage or costs, then HMRC might decide that the entire region is your permanent workplace—meaning you can’t claim a mileage refund at all! Claiming tax relief you don’t qualify for is dangerous, even if it’s just a mistake. If you’re not 100% sure where you stand, talk to the UK’s leading tax experts at RIFT.

How RIFT gets your tax back

From vehicle tax refunds to claiming for essential work expenses, it can take an expert to get a tax rebate from HMRC. HMRC tax refund regulations are complicated enough that even tiny mistakes can leave you badly out of pocket. Worse yet, if you accidentally claim tax refunds you aren't owed, you'll quickly find yourself in serious difficulty.

It's the little details that matter when you're claiming a tax rebate, and with your free MyRIFT account, you'll never be left in the dark. MyRIFT makes it simple to check and update all your claim information, whenever you need to. That's the secret to getting the most from your refund - and getting it fast!

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AMAPWhat are the approved mileage rates (AMAP Rates)?

If you’re using your own transport to get to work, HMRC has set out Approved Mileage Allowance Payment (AMAP) rates to help tackle the cost of fuel and vehicle wear-and-tear. The amounts you can claim per mile depend on how far you travel in a tax year, and what kind of vehicle you use:

Car or van: 45p per mile for the first 10,000 miles, then 25p per mile after.
Motorcycle: 24p per mile.
Bicycle: 20p per mile.

If you’re carrying other employees with you to work in your car or van (and it’s still a work trip for them), then you can claim an extra 5p per mile for each passenger, on top of your usual rate.

DocumentationWhat evidence do I need for a mileage claim?

It really doesn’t take a huge amount of information to claim back the tax you’re owed for your work mileage. However, the more details you can show to HMRC, the smoother your tax rebate claim will go. Here’s the most important paperwork to have on hand:

Details of the places you’ve travelled to for work
In order to refund the tax you paid on your essential travel expenses, HMRC will need to see some proof of where you worked, along with what it cost you to get there in your own vehicle or by public transport.
Details of what you’ve earned and the tax you’ve paid
Your payslips are a crucial thing to keep track of when you’re claiming a tax rebate for your mileage. This is particularly true if you’ve been getting anything toward your travel from your employer, which can affect the refund you can claim.
Other key documents
You agency contract can be extremely helpful in demonstrating that you have to travel to temporary workplaces. Also, MOT certificates, P45 and P60 forms can all serve to keep your claim rock-solid. Remember that it’s not just your work travel that can earn you some tax back from HMRC. Everyday expenses like food, uniform laundry and upkeep of essential tools and equipment can all count toward your tax refund – so keep hold of those receipts!

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