Get help if you’re working at home

You can claim back cash for extra household bills

Take a (tax) break if you’re working from home

The November lockdown means many of us are now back working from home.

Whether you rejoice or despair at this development, using your home as an office will mean additional heating and lighting costs as we head into the cooler months, so be sure to claim the tax relief you’re entitled to from the new online portal: gov.uk/tax-relief-for-employees.

Here’s what you need to know...

Household bills tax relief

Your employer can pay you £6 per week, tax-free, to help cover your bills.

But most businesses are struggling in the current Covid crisis and are probably unable to do this.

You can still claim up to £6 per week, plus other benefits, via the new HMRC online portal, however.

Plenty of us are already using it – HMRC received 54,800 claims in the first 10 days of October alone.

You can claim tax relief based on the rate at which you pay tax. So an employee who pays 20% basic rate tax and claims tax relief on £6 a week, will receive £1.20 a week in tax relief (20% of £6) towards the cost of their household bills.

Higher rate taxpayers would therefore receive £2.40 per week (40% per cent of £ 6) and additional rate taxpayers would receive £2.70 each week (45% of £6).

Over a year, this means you can reduce the tax you pay by £62.40, £124.80 or £140.40 respectively.

You don’t need to provide evidence that your bills have increased unless you are applying for tax relief on costs above the £6 per week flat rate.

You can get up to £6 a week plus other benefits via a new HMRC portal

Other expenses

HMRC is also reminding some workers, including healthcare and care home staff, that they can claim tax relief on workrelated expenses, such as cleaning their work uniforms.

If you have to clean, replace or repair uniforms or tools, or pay fees and subscriptions for your work, you can apply online directly to HMRC and see instantly if you are eligible to make a claim.

Once your application has been approved, the online portal will automatically adjust your tax code for the 2020/21 tax year so you earn more money before paying income tax.

You will receive the tax relief directly through your salary and will continue to receive the adjustment until March.

Alternatively, you can receive the tax relief as a lump sum payment if you apply after the 2020/21 tax year ends.

DIY to save more

Normally, you would apply for tax relief via your self-assessment or by using an accountant.

In 2018/ 19, more than 500,000 people ( 66% of people putting in expense claims) applied using an accountant or other agent rather than claiming directly from HMRC – and they would have had to pay to do this.

But if you are a PAYE employee, you can claim directly to HMRC and keep all of the money you are entitled to.

To learn more about tax saving ideas go to WarrenShute.com or search for The Money Planner weekly podcast.