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UK employees can use online portal to claim tax relief for working from home

26/10/2020

Employees who have been required to work from home during the coronavirus pandemic can now use an online portal to claim work from home tax relief.

Since April 2020, employers have been able to pay their staff up to £6 per week tax-free to support home working and cover any additional costs associated with employees working from home.

The Government has now launched an online portal to make it easy for employees who are working from home to claim the extra funding, and for this year only, you will be able to claim your entire year’s worth of work from home tax relief in one go.

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What is work from home tax relief?

Anybody whose employer requires them to work from home in the UK is able to claim money towards increased costs related to working from home.

While it is possible for many people across the UK to work from home, it’s not always easy. Offices and workplaces are set up with productivity in mind – people’s homes are not.

It can take a lot of effort to create a productive workspace at home, and there are costs involved, including:

– Technology and equipment (Desktops, laptops, extra monitors, etc.)
– Energy (Additional heating used at home during office hours)
– Internet (Multiple people in the home using the WiFi more often – additional/more expensive plans may need to be purchased)

In order to support a person’s ability to work from home successfully, employers are able to pay their staff up to £6 extra per week to put towards the cost of working from home.

With the pandemic ongoing, not every employer will be in the position to pay staff an extra £6 per week, so the Government has made some changes to their system in order to allow employees to apply for work from home expenses in the form of tax relief.

What are the changes to work from home tax relief?

Since the coronavirus pandemic hit early this year, record numbers of employees have been working from home in order to carry on doing their jobs while minimising the spread of the virus.

In order to support employees who have been encouraged to work from home during the pandemic, the Government and HMRC wanted to make it as easy as possible for employees to be able to claim expenses as an amount that is deducted from their taxable income.

As of October, the Government has launched a web portal. to allow employees to apply for their expenses online.

Any employee who has been working from home during the pandemic, and hasn’t received the payment from their employer, can now apply directly to HMRC to have their expenses deducted from their taxable income.

How does work from home tax relief work?

Employees who work from home can now use the Government’s online portal to send a tax relief claim directly to HMRC.

How much you can claim in tax relief depends on the rate at which you pay tax. If, for example, you pay the basic rate of tax – 20% – the level of tax relief you will receive is worked out as follows:

– You claim tax relief on expenses of £6 per week
– You qualify for 20% relief on that £6
– You receive tax relief of £1.20 for every week of the year

Employees paying a higher rate of tax will receive a higher level of tax relief – £2.40 per week for employees paying tax at 40%, and so on and so forth. Over the course of a year, an employee paying tax at 40% on expenses of £6 per week will reduce the amount of tax they pay by £124.80.

The Government recognises the working from home situation is fluid for many people this year – the impact of the pandemic might mean you’re working from home full-time one month, and back in the office full-time the next month.

That’s why, for the 2020 to 2021 tax year only, the Government will allow employees to claim for their entire year’s worth of work from home tax relief in one go, and receive a single lump sum payment.

Am I eligible for work from home tax relief?

You’re automatically eligible for work from home tax relief as long as you:

– Have been required by your employer to work from home
– Have increased costs related to your working from home (energy, internet, etc.)

It doesn’t matter whether you are working from home full-time or part-time. If your employer has required you to work from home at all during the pandemic, and this has caused you to have additional expenses, you are eligible to claim the full allowance of £6 per week.

For more information on work from home tax relief, visit the Money Saving Expert blog for a handy guide on the subject.

How do I claim tax relief for working from home?

To claim tax relief for expenses related to working from home, all you have to do is visit HMRC’s dedicated working-from-home microservice .

You will be asked to answer a few questions about your circumstances, including when you started working from home, whether you complete Self Assessment tax returns, and whether your employer has already paid your expenses for working from home.

Once you have provided your information, the system will take your tax code and automatically calculate the entire year’s tax relief you qualify for based on that code.

How can I get extra financial support during the pandemic?

The coronavirus pandemic has hit many people financially, and with pandemic still raging in the UK, that financial uncertainty looks like it will continue for some time to come.

If you’re looking for assistance with your finances, whether it’s to check if you qualify for work from home expenses, or to regain control of your debts, we can help.

Creditfix helps people deal with deb every day – our expert advisors have offered guidance and assistance to 200,000 people and counting. If you want to take the first step on your journey to debt free, give us a call on 0808 253 2564. We’d love to hear from you.

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