For 2020/21 you can claim a whole year’s relief even if you have only worked at home for part of it since 6 April. The full years claim is only currently available for 2020/21, in future years you will be required to actually work from home for each week that you claim.
Launched on 1 October, the online portal https://www.gov.uk/tax-relief-for-employees/working-at-home is designed to be simple to use and has been set up to process tax relief on additional expenses for employed workers who have been told to work from home by their employer to help stop the spread of coronavirus.
It took, Alex Dent, our Tax Manager all of 2 minutes to use the portal. Once you complete the check you just need to sign in to your personal tax account and complete the claim with the date that you started working from home.
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. Employees who have not received the working from home expenses payment direct from their employer can apply to receive the tax relief from HMRC https://www.gov.uk/tax-relief-for-employees
Eligible taxpayers can claim tax relief based on the rate at which they pay tax.
For example, if an employed worker pays the 20% basic rate of tax and claims tax relief on £6 a week, they would receive £1.20 a week in tax relief (20% of £6 a week) while higher rate taxpayers would the receive £2.40 a week (40% of £6 a week).
Over the course of the year, this could mean taxpayers can reduce the tax they pay by £62.40 or £124.80 respectively.
Employees do not need to provide evidence to show their bills have increased unless they are applying for tax relief on costs above the £6 per week flat rate, in which evidence of the increased costs may be required.
If you were sent home prior to 5 April 2020, you can also claim from the date the lower rate of £4 a week.
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.
If you have any questions about any of the above, or need some guidance on using the portal, please contact us.
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