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Spotlight On… Working from home allowances

Welcome to the latest edition of our ‘Spotlight On’ series. In this edition Employment Tax specialist Jo How looks at the working from home tax relief and how you can apply.

With the Government advising us to keep working from home where possible, millions of people are likely to be eligible for the working from home tax relief for the 2021/22 tax year.

Working from home inevitably results in additional costs such as heating, electricity, metered water etc., so any assistance with these is helpful.

Who can claim the working from home tax relief?

The working from home tax relief is relevant to those employees advised or required to work from home by their employers. Employees who choose to work at home cannot claim this allowance nor can those whose employers have paid the allowance to them.

What do you need to know?

For 2021/22, you can claim £6 a week without having to show or provide any evidence of additional costs incurred by working from home. The amount of tax relief you’ll get depends on your marginal rate of tax. If you are a basic rate taxpayer, then you would get tax relief of £1.20 per week (20% of £6), a higher rate taxpayer, £2.40 per week (40% of £6) and an additional rate taxpayer, £2.70 per week (45% of £6).

Alternatively, you can claim the exact amount of the extra costs you incur but you will need evidence to support these in the form of receipts, bills, or contracts.

HM Revenue & Customs (HMRC) have stated that you can claim for the whole year even if you are only required to work at home for part of that time or if you return to full time office working during the year. However, it is important to remember that you need to have incurred additional expenses to be eligible.

Claims can still be made back to the start of the pandemic in March 2020 when the Government’s working from home order was first announced, so there is no need to miss out if you haven’t already made a claim for that period.

What should you do next?

To claim tax relief for working from home, employees can apply directly to HMRC using the following link: Claim tax relief for your job expenses: Working from home – GOV.UK (www.gov.uk). It should only take a few minutes to do and is a completely free service. HMRC will adjust your tax code so you receive the tax relief over the course of the tax year.

If you complete a Self-Assessment tax return, then you will need to make the claim through this process at the end of the tax year instead.

It may also be possible to claim for equipment you have had to purchase to do your work such as a laptop, chair, or mobile phone.

Would you like to know more?

If you would like to know more about working from home allowances or how you can make a claim, please get in touch with your usual Blick Rothenberg contact or Jo, whose details you can find on this page.

Contact Jo