With many more employees being required to work from home again due to COVID-19, it is worth remembering that you might be eligible to claim for tax relief direct from HMRC, if you are not already receiving working from home expenses from your employer.
What is working from home tax relief?
From 6 April 2020, employers have been able to pay employees up to £6 a week tax-free to cover additional costs if they have had to work from home. Employees, who have not received the working from home expenses payment direct from their employer, can apply to receive the tax relief direct from HMRC.
How much you can claim?
There are two options - you can either claim tax relief on:
- A flat rate of £6 a week from 6 April 2020 (up from the previous tax year’s rate of £4 a week). You will not need to keep evidence of your extra costs
- The exact amount of extra costs you’ve incurred above the weekly amount. In this instance, you will need evidence such as receipts, bills or contracts
Employees will receive the tax relief that corresponds with the Income Tax rate that you pay For example, if you pay the 20% basic rate of tax and claim tax relief on £6 a week you would get £1.20 per week in tax relief (i.e. 20% of £6). If you are a higher rate tax payer, you would receive £2.40 a week (i.e. 40% of £6 a week).
How do you claim working from home tax relief
The government launched an online portal on 1st October, which was set up specifically to process tax relief on additional expenses for employees who have been required to work from home due to the coronavirus pandemic.
Simply visit the Government’s online working from home tax relief portal to make your claim.
You will need your Government Gateway user ID and password to make the claim. If you do not already have a Government Gateway user ID, you can quickly set one up. Have your National Insurance number and a recent payslip (or your P60 or valid UK passport) handy.
What happens next?
Providing you qualify, your tax code will be changed, sometimes as quickly as within 24 hours. You will receive the tax relief directly through your salary and will continue to receive the adjustment until March 2021.
Can you use the portal if you usually complete a self-assessment return?
You cannot use the online portal to claim the working from home tax relief if you complete a self-assessment tax return.
While DRG Chartered Accountants cannot make this claim on your behalf, please do get in touch if you have any questions on the working from home tax relief or any other personal tax issues.
For further information
Gov.uk website: Claim tax relief for working from home
Gov.uk website: Claim tax relief for your job expenses
DISCLAIMER: This information is for guidance only, and professional advice should be obtained before acting on any information contained herein. We will not accept any responsibility for loss to any person as a result of action taken or refrained from in consequence of the contents of this publication.