Offered tax back for working from home? Beware the claims firms that take HALF your cash

MILLIONS of Brits can claim tax back because they’ve worked from home during the pandemic.

But they could be missing out on the full amount they are owed if they resort to using a claims firm rather than applying directly.

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Third party companies are advertising online encouraging people to make a claim for the cash back, including on Facebook and Google.

They are offering to help but will take as much as half the cash for doing so.

But you can claim the cash back yourself using a simple tool from HMRC for FREE.

Which? has previously urged consumers not to turn to third-party firms if they believe the taxman owes them money, or risk missing out on hundreds of pounds.

The consumer group counted a total of 208 firms with “tax reclaim”, “tax refund”, “tax claim” and “tax rebate” in their names on Companies House.

These firms say they take the hassle out of claims for you but take a cut of your money.

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This is typically between 25% and 48% of your pay out – but it costs nothing to apply direct through HMRC and takes no time at all.

We were served one advert encouraging to “claim now” – but there was no mention of a fee in the ad, on the page you click through to, or on the main page of the website.

It’s one of 14 companies that make no mention of the fees they charge on their main website page or in their FAQs section.

The firm charges a fee of 48% taking nearly half of any money you get back though.

Someone who has not yet claimed the tax back but is eligible for both years of the pandemic and pays higher rate tax can claim £250.

If they used the firm they would get back just £130.

Applying directly through HMRC would get them the full amount.

The same firms also offer the same services for other tax rebates, like marriage allowance, for a fee.

But these can also be claimed directly from HMRC for free, meaning you can keep 100% of the cash.

Many of the firms that help claim for tax rebates aren’t regulated.

That means there is no official system for complaints and you can’t go to the Financial Ombudsman Service if things go wrong in the same way you now can for a claims management company.

Which? money editor Jenny Ross previously said: “Our research shows that huge numbers of people are coming into contact with firms seeking to entice them into handing over potentially hundreds of pounds of their tax rebate in unnecessary and hard to justify fees.

“For most people with a rebate to claim, HMRC is the best port of call. Go to its website directly to ensure you aren’t left footing any unnecessary bills.” 

How can I claim working from home tax back for free?

HMRC has a handy online tool to help you submit a claim for this year and last year.

You’ll need a Government Gateway user ID and password, which you can create online in less than 10 minutes.

Make sure you have your National Insurance number and a recent payslip, P60, or a valid UK passport to hand.

Once the application has been approved, your tax code for the 2021 to 2022 tax year will be adjusted automatically.

You will then see the tax relief directly through your salary, and will continue to receive the adjustment until April 5, 2022.

You won’t get a one off payment when claiming for this year, instead it will be included as part of your weekly or monthly payments from your employer.

But for claims for last year, you’ll get the money as a lump sum through your salary.

How much tax will I get back for working from home?

You can claim tax relief on £6 per week for the current tax year.

If you are a basic rate tax payer, the relief is worth 20%, which means that you’ll get £1.20 per week.

Over the course of the year, this adds up to £62.40, for anyone earning between £12,500 and £50,000.

If you pay higher rate tax your relief will be worth 40% or £2.40 per week.

This adds up to £124.80 for the year and is available to anyone who earns more than £50,000 per year.

You can claim for last year too (the tax year runs from April to April) if the same applies – your employer required you to work from home, even for just a single day.

HMRC will, in fact, accept backdated claims for up to four years

You won’t be able to claim the tax back if your employer is covering your working from home expenses already.

You also can’t claim if you’re self-employed – since you work for yourself you can claim expenses on your tax return.

Here’s other ways you can claim money back – and it could be worth thousands of pounds.

This post first appeared on thesun.co.uk