We all make mistakes from time to time, and everybody deserves a second chance to put things right, right? Well, not according to the taxman. In HMRC's book, we all have to be pin-point precise and on-the-dot every time. That's why the smart thing to do is look at what people often get wrong. If you pay attention to the most common mistakes made when claiming tax refunds or filing self assessment, you go a long way toward avoiding them yourself.

At RIFT, we're experts in claiming tax refunds the right way. Here are some of the expenses-related mistakes we see people making most often.

Claiming for non-work clothes.

If you've got a job that takes you out of your house, the chances high are you're required to wear clothes of some sort. For some of us, that means nothing more than a general-purpose, casually fashionable outfit we threw together at random. For others, it's a smart suit and shoes you can see your reflection in. Either way, HMRC won't foot the bill for cleaning your clothes just because you wore them to work this week. If you want to include clothing repair or laundry as expenses in your tax refund claim, it has to be strictly necessary to your work. Ask yourself the following questions:

  • Is my clothing only useful for my job, like a clown costume for a party entertainer?
  • Is my clothing protective by design, and needed for my work? You can't usually claim for a cleaning a hard hat if you work in an office.
  • Does my clothing specifically and exclusively relate to my work? For instance, does it feature a company logo that you're required to display in your job?

Unless you can confidently answer yes to at least one of these, don't even think about counting it in your tax refund claim.

Claiming for "normal commuting".

Travel expenses are a huge part of most tax refund claims. It's incredibly important to remember which kinds of journeys count, though. If you're commuting from your home to a permanent workplace, for example, HMRC won't give you back a penny.

The only time you can claim travel costs as expenses is when your travel for work, rather than to work. That is, travel to and between temporary workplaces can be claimed as an expense, as can business travel outside of your normal commute.

The lines between what can and can't be claimed for are a little blurred at times, so the best thing to do is talk to RIFT about your travel. We'll quickly sort out what you're eligible for.

Confusing mileage claims with fuel or road tax costs.

This is a pretty simple one, but it trips up a lot of Sole Traders. When you're claiming travel costs based on HMRC's standard rates, you're not just getting tax relief on the fuel you burn. That standard rate per mile includes all your motor-related costs, not just the petrol. You can't stack fuel or road tax expenses on top of it, for example - no matter how many people insist on trying each year.

Not all your food and drink counts.

Just as you probably have to wear clothes in your everyday life, the chances are you're also used to eating several times a day. HMRC noticed a long time ago that if you don't eat, you die. That's why you can't just claim all your food costs as expenses in a tax refund claim.

There are important exceptions to this, and as usual most of them come down to temporary workplaces and business travel. If your job involves working at different sites for short periods (under 24 months), then you can claim for the food you have to buy. In the same way, if you have to stay overnight on business, your food bills and accommodation costs are legitimate expenses. There are plenty of tricky ins and outs about this, so definitely get in touch to see precisely where you stand.

Not knowing your personal expenses from your work ones.

When you're filing a Self Assessment tax return or making a tax refund claim, you have to learn to think like the taxman. He's got a good nose for incorrect expenses claims, and will waste no time in sniffing yours out if you make any. This is a particular issue for self-employed people. Just because a cost comes out of your business income doesn't automatically make it a "business expense". Here are a few items to avoid claiming for:

  • Your own wages, National Insurance or pension contributions.
  • Any private health insurance you have.
  • Income tax payments (yes, some people actually think they can claim for these!).
  • Personal insurance policy premiums.

At the end of the day, claiming legitimate expenses isn't rocket science. It's far more complicated than that - and the dangers are just as real. Whether you're filling in a tax return or making a refund claim, you've got to be very sure of your footing with expenses. A mistake may be honest, but the taxman's still going to raise Hell if you make one.

That's why RIFT's here. We've got the best eyes in the business for spotting problems with your expenses. Get in touch to see how we could put money back in your pocket, and you back in HMRC's good books.