Working from home? …

WORKING FROM HOME?…..

As we enter another national lockdown, many of us will be required to start/continue working from home over the coming weeks/months.

With temperatures dropping and days getting darker, those working from home will undoubtably see increased household costs, such as heating and lighting.

HMRC have now announced that for 2020/21 (only), even if you were required to work from home for ONE DAY during the tax year, you can claim tax relief for the WHOLE YEAR.

The rate is set at £6 per week, £312 per year and can be claimed in one of two ways:

Employers can pay you £6 a week extra tax-free.

Employers can give you an allowance up to this amount and what they give you is free from tax/NIC, so you get it all.

Claim tax relief on £6 a week.

If your employer can’t/won’t pay expenses for your extra costs due to necessary working from home, but you have them, then you can deduct the amount from your taxable income. To make the process easy, HMRC says that claims in line with the employers’ payment (ie, for £6 a week) will not need to justify that figure – meaning you won’t need to keep receipts or prove information. Tax relief of £6 a week equates to a saving of £62 a year for a basic 20% rate taxpayer, £125 a year for a higher 40% rate taxpayer. 

Of course for some people, additional costs may well exceed £6 per week, and in this situation you can claim more, but will be required to evidence the increase in costs, and be able to apportion these specifically to working from home.  This is obviously more onerous and could also lead to a query from HMRC.

From April 2021 this relief is expected to return to the £6 per week but only for the actual weeks you were required to work from home.

Many employers are now considering more flexible working arrangements with employees, perhaps splitting their working week between office based and homeworking.  If this is the case then you need not apportion the £6 per week, it is paid/claimed in full for any week when you were required to work at home at some point in that week.

To talk to us about making a claim, please contact us on 01429 234414, alternatively you can contact our Associate, Paul Buckley directly by email (paul.buckley@waltonscw.co.uk).