The rise of coronavirus has resulted in businesses adapting to working from home, with many discovering that it can be just as effective as being in the office. Social distancing measures have resulted in many workplaces doing a rotational basis, where staff do part of the week in the office and the rest at home. However, many remote workers experience additional expenses due to heating and electricity usage – they can claim £6 per week tax benefit because of this.

HMRC have confirmed that if you are required to work from home and have additional expenses due to this, you are eligible to claim this tax break. This applies even if:

  • You are only working from home part-time (even just one day a week)
  • Others are going into work

This is because, when working from home, you can claim for additional expenses related to heating and electricity. There are two ways in which you can do this:

  • 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. – however due to the nature of business now with many firms struggling, this may not be the best idea. Instead you can,
  • Claim tax relief on £6 per week (worth £1.20/wk at 20% tax, £2.40/wk at higher rate) – HMRC have said that to claim a relief of this amount, you will not have to prove any increase in expenditure. However, in order to claim a tax relief of more than this amount you will need to show evidence of the increased costs.

Over the course of the year, this could mean taxpayers can reduce the tax they pay by £62.40 or £124.80 respectively.

How to claim the tax relief

HMRC is encouraging individuals claiming tax relief for working from home to apply directly via the portal. Agents will not be able to use the new service to apply for the relief on a client’s behalf. The tax authority points out that those who are paid through PAYE can claim directly to HMRC.

Once the application has been approved, the online portal will adjust an individual’s tax code for the 2020 to 2021 tax year. The employee will receive the tax relief directly through their salary and will continue to receive the adjustment until March 2021.

HMRC is also reminding employed workers, for example healthcare workers and care home staff, that they can also claim tax relief on work-related expenses, including cleaning their work uniforms.

Employees who clean, replace or repair uniform or tools, or pay fees and subscriptions for their work can apply online directly to HMRC and see instantly if they are eligible for tax relief on work expenses here: https://www.gov.uk/tax-relief-for-employees/working-at-home.

 

 

 

Author: Neil Whittingham