HMRC’s “Christmas Bonus” May Not Be That Simple
HMRC recently released an announcement of a “Christmas bonus for millions of workers” (https://www.gov.uk/government/news/christmas-bonus-for-millions-of-workers) with the idea of a DIY rebate allowing workers to claim back money in time for the festive season. This is great news at a glance, but before workers dive into the claim it is worth stopping and thinking about the process – rushed claims can end up costing more than they are worth, especially if the refunded cash is spent immediately.
Workers hurrying through claims could not only miss out on the full rebate they are entitled to, but, more worryingly, could end up over estimating the money that is owed and then end up landed with a bill from HMRC to return the excess rebate.
Like the Institute of Chartered Accountants in England and Wales (https://ion.icaew.com/taxfaculty/b/weblog/posts/hmrc-encourages-workers-to-claim-expenses), RIFT Refunds has concerns that workers may end up in financial difficulties through lack of clarity in the announcement and the idea of a hasty claim that will then need paying back.
RIFT MD Bradley Post comments (https://www.riftrefunds.co.uk/blogs/hmrcs-christmas-bonus-may-not-be-that-simple/):
“We’re delighted to see HMRC doing more to raise awareness of overpayment of tax by UK employees – this something we’ve championed for 20 years . The UK’s tax laws allow workers to claim back tax on many of their work related expenses. For example, when people travel to temporary workplaces, they can reclaim some money from HMRC for their mileage, along with a range of other costs for uniforms, tools and professional fees.
Of the people who already know that they can make a refund claim each year, they often don’t have the time or expertise needed to do it well. As a result, many workers are still paying too much tax on their income each year, even when they’ve made their claim.
Money is always tight at this time of year, and it’s really tempting to “just get a claim in” – but if that claim is incorrect, those people could end up have to pay back some or all of that refund and end up in a worse position than they are now. As with many things, if it’s a simple job you can do it yourself, but if you want peace of mind that your refund will stay in your pocket where it belongs, it probably pays to get the experts in.”