Working From Home Tax Relief: Can You Claim?

HM Revenue and Customs is currently accepting tax relief claims from those who were working from home due to COVID for the 2021-2022 period. Over 550,000 employed workers have made a claim already for the current year, and over 3 million claims were made last year. Many have benefited from tax relief as a result. Are you eligible and yet to claim?

If you are employed and were asked to work from home by your employer due to the COVID pandemic, and as a result you found that your household costs increased, you will likely be eligible to claim working from home tax relief. It is a simple process to claim through the online portal, and could be well worth doing.

Here is where to check if you are eligible.

Over half a million people have reduced their Income Tax liability by up to £125, according to HMRC, by claiming tax relief on their working from home expenses.

HMRC continues to provide support for those affected by the pandemic. From 6 April 2020, employers have been able to pay employees up to £6 tax-free without them having to provide evidence of increased household outgoings due to working from home. If you have not received the working from home expenses payment direct from your employer in this way, you can apply to receive the tax relief directly from HMRC. Once your application has been approved, your tax code for the 2021-2022 tax year will be adjusted and you will receive the tax relief through your salary until March 2022.

How much is working from home tax relief worth?

If you are eligible, you can claim tax relief based on the rate at which you usually pay tax. For example, if you pay the 20 per cent basic rate of tax, and claim tax relief on £6 per week, you could receive £1.20 per week in tax relief (20 per cent of £6 per week) towards your household bills. Higher rate taxpayers could receive £2.40 per week (40 per cent of £6 per week). During the course of the year, this could result in a reduction in tax of £62.40 or £124.80 respectively.

If you were working from home last year, but did not claim the tax relief, it is not too late. HMRC will accept backdated claims for up to four years and will make lump sum payments for any successful claims.

Have employers always been able to reimburse additional household costs for staff working from home?

Employers have been able to make tax free payments to meet or reimburse additional household costs for employees working from home since 2003.

Employees need not provide any evidence of elevated bills, unless they are applying for tax relief on costs above the £6 per week flat rate. Workers will receive the tax relief that corresponds with the Income Tax rate they pay. For those employed workers who complete and annual tax return, they are required to apply for the tax relief through their Self-Assessment.

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