WORKERS may be able to claim tax relief of up to £125 even if they’ve only worked from home once, says Martin Lewis.
The MoneySavingExpert.com founder has used his weekly newsletter to urge anyone told by their boss to work from home, even just for one day, since April 6 to make a claim.
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Martin said: “Right now many firms have closed workplaces and that means across the UK millions of staff are temporarily required to work from home, even if it’s just for part of the week, and therefore are eligible to claim if you’ve had increased costs due to it.”
Under the scheme, your tax code is adjusted so you’re not paying as much tax. The idea is this will help to cover the additional costs of working from home, such as higher energy bills.
It comes after HMRC confirmed that due to the “fluid” situation on working from home, it’s now accepting claims for the whole tax year – and it’s launched a new online tool to help you do it.
A HMRC spokesperson said: “We recognise that the working from home situation is very fluid this year, so we’re accepting claims for the full year’s expenses.
What you’ll need to make a working from home tax claim
YOU’LL need the following basic information to hand before you make tax claim via HMRC:
- Something to prove your identity – this could be a passport, driving licence, or you can answer various questions based on your credit file
- A P60 or payslip from July 2020 onwards
- National insurance number
- Your Government Gateway user ID and password or you can create a user ID if you do not already have one.
“That includes even if people have only worked from home for some of the year, to avoid needing to contact us if you have to work from home again.”
The Prime Minister initially told people to work from home at the start of the crisis back in March but later encouraged people back to their offices in August.
But with coronavirus cases rising Boris Johnson U-turned on this in mid-September telling people to once more work from home if they can.
The crucial point still remains, however, that your employer must have required or asked you to work from home to claim. This doesn’t apply if it’s something you’ve decided on your own whim.
We explain what you can claim below and how to go about it.
How much can I claim?
This is a little bit complicated, but essentially your employer can effectively pay you £6 a week extra tax-free to cover expenses.
But with many firm struggling right now, it’s more likely you’ll instead claim tax relief on the £6 a week.
If you claim the tax relief, the exact reduction to your tax bill depends on your tax rate and it’s the highest rate of tax you pay that’s used.
For those paying the standard tax rate of 20%, you would get £1.20 a week in tax releif.
While for people who pay tax at the higher rate of 40%, you’d get £2.40 a week.
Additional rate tax payers who pay 45% will get £2.70 a week.
So claim for the entire 2020/21 tax year and that’s tax relief of £62.40 for basic rate taxpayers, £124.80 for higher rate tax payers, and £140.40 for additional rate tax payers.
How do I claim the cash?
If you haven’t already submitted a claim for this tax year, HMRC launched a new online tool on October 1 to help you claim the relief in one go.
Once the application has been approved, the online portal will adjust your tax code for the 2020 to 2021 tax year.
You will then receive the tax relief directly through your salary and will continue to receive the adjustment until April 5, 2021.
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This means you won’t get a one off payment, instead it will be included as part of your weekly or monthly payments from your employer.
You’ll be able to see the money on your payslips.
Workers can also use the tool to claim going back the past four tax years. In this case you’ll receive a lump sum payment instead of a monthly salary boost.
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