Apprenticeships and Tax Refunds
12th March 2018
Apprenticeships are big business in the UK, particularly in the building game. The main reason why they're so important is the simple fact that they work. You really can't pick up most of what you need to know about construction in a classroom. Understanding what it takes to succeed on an active site means spending your time out there, learning the trade.
How many construction apprentices are there in the UK?
Close to 25,000 people began construction apprenticeships in 2015/16, according to figures form the Construction Industry Training Board.
Around 8,500 employers got CITB apprenticeship funding in that time. We're at a point where bringing people into the building trade is critical, with a looming shortage of skilled workers and about 180,000 new pairs of hands needed in the next 4-years.
Tax refunds and apprenticeships
Of course, not all the skills you'll need in construction are picked up on-site. Making the most of a job in the trade means understanding how to handle your money. Every year, the taxman clings onto £180 million more than he's owed, because people working in the building trade aren't claiming their tax refunds. Even those who do claim are often missing out on everything they could get back by not keeping good records of the expenses they're shelling out.
If you're new to construction and don't know about tax rebates, here are the basics.
- When you're paying for your own travel to temporary worksites, you can claim cash back from HMRC.
- On top of that, you can claim for food costs, along with several other essential expenses.
- Typically, you're looking at knocking 20% of what you're spending to do your job off your tax bill each year.
- It mounts up, and it will sit in HMRC's account instead of yours unless you claim it back.
Tax Rebates for Self Employed and CIS workers
Later on, if you decide to go into business for yourself, you'll be dealing with the Construction Industry Scheme (CIS). Under CIS, you'll be losing 20% of your pay before you even get it, without taking your tax-free Personal Allowance into account. That can easily mean losing £2,000 a year to HMRC, over what you actually owe - and you need to ask them to give it back!
How do apprentices claim tax refunds?
Claiming back tax takes a few good habits. Your apprenticeship is a great time to get used to recording what it's costing you to do the job. Keeping receipts, tracking mileage and so on are essential to avoid losing too much to the taxman each year.
If you chuck your receipt in the bin after buying your lunch at work, you might as well be throwing the £5 you spent in there. People spend much more on their meals at work than they realise and if you've got evidence of those costs you can claim them back. Meals typically add about £250 - £500 per year to an average tax refund.
Even if you're not earning enough to pay a lot of tax yet, or paying out enough to have lots of expenses to claim, it's still worth finding out if you're owed anything. Why should your money be sitting in the taxman's account?
How can RIFT help apprentices claim tax refunds?
RIFT has been clawing back tax for people in the building trade since 1999, and we keep everything simple and painless. For starters, we'll set you up with a free MyRIFT account to keep all your information secure and in one place. With MyRIFT, updating your expenses is a simple as snapping a photo of your receipts. You've got full access to all your information at all times, and you're never left in the dark.
Depending on your apprenticeship, you may be making enough money to pay tax on your income. In that case, we can start putting your refund claim together straight away. You can find out if you've got a claim to make by checking our free online tax refund calculator. Just answer 4 quick questions and we'll let you know if you're owed cash back. Even if you can't get a refund just yet, giving us a few details now means we can send you a reminder and hit the ground running when you're ready to start your first claim.
It doesn't need to be a huge hassle to get back what you're owed from the taxman. However, it definitely pays to have good help on your side. RIFT are the UK's leading tax rebate and tax return experts, and we're ready to take your apprenticeship from learning experience to earning experience.