TAX BASICS

Work from Home Tax Relief that can be claimed in the UK.

It might take some time to get back to a normal state and millions will continue to work from home. Due to the pandemic, people are continuing to work from home and last year the work from home tax relief was introduced by the HMRC. The HMRC has recently confirmed that the work from home tax relief scheme is applicable for the 2021/2022 tax year. Let us take a look at how you can claim tax relief.

How to apply for work from home tax relief?

You can start by checking that you are eligible to apply for the tax relief and then apply in the government portal. In order to be eligible you need to satisfy the following :

  • You should only be claiming work from home expenses. There could be other expenses but they must be claimed separately.
  • You shouldn’t have paid for your self-assessment. If you have paid then you will have to claim with your next tax return.
  • Your employer shouldn’t have paid your expenses already.
  • You must have started to work from home due to the pandemic.

Once you satisfy the above requirements you can check and claim the tax relief from the government site. You have to log in using the government gateway user ID. Once you are logged in you have to state the date from when you are working from home and you will receive a rebate for the tax year. You will be able to take home more before tax if your claim is successful.

How much can I claim as work from home tax relief?

Taxpayers get a flat rate of tax relief on £6 a week. However, the tax relief depends on the income band of the taxpayer.

  • A basic rate tax payer can get £1.20 a week (i.e. 20% of £6). Therefore it will add up to £60 a year.
  • A higher rate tax payer can get £2.40 a week (i.e. 40% of £6). Therefore it will add up to £125 a year.

What if the costs are higher?

If your expenses are more than the standard rebate then you have the opportunity to claim the extra amount. However, you will need evidence like a bill or receipt to prove the expenses. The claim will also vary according to your employment status.

What can an employed claim?

If you are an employed worker then you can only claim for the expenses that are related to work. It could be the extra power costs or the phone bill due to business calls. However, you cant include costs which you use for both office and personal use like broadband and rent.

What can a self-employed claim?

You can use the expenses to reduce the profits and hence your taxable income. As a self-employed you can claim more costs. However, it is also related to the time you spent at your home. If you spent more than 25 hours or more in a month at home then you could use HMRC simplified expense checker. This allows you to compare the amount you can claim by working out the actual costs and using the simplified expense system.

Feel free to contact us for more clarifications and queries.

Sidharth Bharthan Menon
CEO, taxtotal​