Claim two years’ tax relief if working from home
If you’re an employee who’s had to work from home even for just a couple of days you could be owed up to £280 by HM Revenue and Customs (HMRC).
It’s now confirmed that if you’ve had to work from home during the pandemic, and had extra costs, you can get relief for the entire tax year.
WHAT IS THIS TAX RELIEF?
It’s always been the case that if your employer has required you to work from home, and you’ve had additional costs because of it (eg heating or electricity) then you’re able to claim for these increased costs - known as working from home (WFH) tax relief.
See my moneysavingexpert.com/ Wfhtaxrelief guide for more help.
In brief, to claim the tax relief you must have, and declare that you have had, specific extra costs due to working from home. Apportioning extra costs, such as heating and electricity, is tough, so there is a flat rate of £6 a week available to you, which you can get either as an extra £6 per week tax-free from your employer or as £6 tax-relief.
HMRC says that for claims of £6 a week, you won’t need to keep receipts or prove information (if you want to claim more, you’d need to prove it).
TAX RELIEF OF £6 PER 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)
If you’re not the only employee in the house who’s been required to work from home, and costs have increased specifically from each individual doing so, you can each claim.
WORK FROM HOME FOR JUST A DAY AND YOU GET THE WHOLE YEAR’S RELIEF
During the 2020 lockdown as millions of UK staff were required to work from home temporarily, HMRC changed the way the WFH tax relief operates.
In October it launched a ‘microservice’ which, even if you only needed to work from home for ONE day and had extra costs, you automatically got the WHOLE tax-year’s relief. As the new 2021/22 tax year started on April 6, HMRC decided to continue that microservice for 2021/22 – so many can claim TWO year’s worth of relief – up to £280.
HOW TO CLAIM TWO YEARS’ RELIEF (OR ONE EXTRA IF YOU ALREADY CLAIMED)
Most employees (including part-time) can use the microservice at Gov.uk, unless you do a self-assessment.
Required to work from home at any point between April 6, 2020 and April 5, 2021? If so and you haven’t claimed yet, you can still do that via the microservice. In fact, if you started working from home at the start of the first lockdown, on March 23, 2020, just put that date in too.
Payment for these past tax years will be via a cheque / Bacs.
If you’ve claimed for 2020/21, you must claim again for the 2021/22 tax year, via the same microservice. Relief for the current tax year will be paid via a change in your tax code.