Since lockdown, those working from home have found themselves saving money on daily expenses such as travel, lunches and the daily coffee purchasing. However, these costs may have been reattributed to other outgoings that align with working from home, such as business telephone calls or electricity and heating bills.
If you have been forced to work from home (not if you’ve chosen to work from home), then you may be able to claim tax relief on some of the bills you have had to pay, due to working from home on a regular basis.
How much can I claim?
HMRC have put in place a ‘blanket’ costing approach in order to pay everyone as quickly and efficiently as possible, rather than working out exact electricity bill costs vs usage.
HMRC now allows you to claim up to £6 per week of expenses without having to provide bills or paperwork as evidence. This doesn’t directly mean you save £6 a week but instead you save the tax you would have paid on it. From 6th April 2020, this works out to be £1.20 a week for a basic rate taxpayer, or £2.40 a week for a higher rate taxpayer.
In order to make a claim you must have had to work from home (haven’t chosen to do so) and incurred extra costs due to working from home. It is also possible to claim more than £6 per week, but you have to provide paperwork to support your claim.
If your employer does choose to provide a ‘working from home allowance’, that would be tax free up to £6 per week, which means you can’t make an additional claim for tax relief on top.
How can I claim?
If you normally complete a Self-Assessment tax return, you can include your claim details on there. If you do not complete a Self-Assessment, you can claim by completing a P87 form, either online or by post.
These allowances have been available for years, but awareness has grown since the pandemic forced many offices to close.
For further details, please see the Government Guidance on Employees Working at Home
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