Anyone who works from home usually can claim for increased costs against their tax for the specific period of time they are at home but the pandemic motivated the government to allow claims for a whole year, regardless of how long you have worked from home. This has been extended to this tax year too so, in effect, you can claim for two years’ increased costs at £6 a week if you’ve just worked at home for as little as one day for 20/21 and 21/22 tax years.
Employers - tell your staff about this. It’s not huge sums of money but it’s important that it’s not overlooked and your employees will thank you for the advice.
"We recognise that the working-from-home situation is very fluid this year, so we're accepting claims for the full year's expenses, even if people have only worked from home for some of the year, to avoid needing to contact us if you have to work from home again." [Source: HMRC]
What can you claim? Tax relief of £6 a week equates to a gain of… £1.20 a week for a basic 20% rate taxpayer £62.40 a year £2.40 a week for a higher 40% rate taxpayer £124.80 a year £2.70 a week for a top 45% rate taxpayer £140.40 a year
As an alternative option, the employer can pay the employee £6 a week tax-free.
If the employee believes the costs are higher than £6 a week, then additional costs can be claimed on top of that.
Some notes on the criteria to qualify:
1. The employee must be working from home as a direct result of the pandemic, either because they are self-isolating or following government guidelines.
2. Where additional costs have been incurred and not reimbursed by the employer, tax relief may be claimed from HMRC.
3. There are rules around what can be claimed if the home-working expenses have been reimbursed by the employer (s.336 ITEPA 2003) – we can advise on this.
4. As an alternative, employees can claim £6 per week for expenses incurred whilst working at home.
5. If Broadband was installed purely to accommodate someone working from home it can be claimed for. If it was already installed, no claim can be made.
How to claim
Link to claim yourself:
https://www.tax.service.gov.uk/claim-tax-relief-expenses/only-claiming-working-from-home-tax-relief where you will be able to follow the directions and complete your claim yourself.
Contact us to arrange our help: