During the pandemic, employees required to work from home have been able to claim tax relief for additional costs, if these are not reimbursed by their employer. Tax relief for the 5 April 2022 tax year is also available, and employers may like to bring this to the attention of relevant members of staff so that they can make a claim.
Submit a new claim
Employees should be aware that they must make a new working from home tax relief claim for the 2021/22 tax year. Even if they claimed tax relief in 2020/21, the old claim does not carry forward. So long as the employee has at some point been required to work at home, relief should apply to the whole tax year. This is regardless of whether staff are brought back to the workplace during the year.
Staff who didn’t get round to claiming tax relief last year haven’t lost their opportunity; HMRC will accept a claim for this period for up to four years. Find out more here.
Working from home tax relief: a recap
Employees can claim tax relief on up to 6 per week, or 26 per month, to help with additional costs if they are required to work from home because of Covid-19. Tax relief is based on the rate at which employees pay tax. Someone paying 20% basic rate tax and claiming relief on 6 weekly, would get 1.20 in relief weekly (20% of 6). Higher rate taxpayers would get 2.40 weekly (40% of 6).
The relief applies to costs such as business phone calls and heat and light for the workspace. It does not apply for the purchase of office equipment or furniture; different provisions apply here.
Making a claim
Employees should be directed to HMRC’s online portal on gov.uk. HMRC advises that they search ‘working from home tax relief’ to find it. The portal checks eligibility and accepts an online claim through Government Gateway there and then. Alternatively, if someone usually completes a self assessment tax return, they will be re-routed to claim there. The gov.uk service is easy to use; employees are well recommended to claim themselves, rather than use a commercial repayment service charging commission.
Home working – a permanent fixture?
As we adjust to a more socially distanced post-lockdown world, figures indicate that many UK businesses – having seen the benefits of flexible, remote working – are now opting to ditch the office building and make home set-ups a more permanent arrangement. Some are even looking at online stores (you can check it out here) to buy the required furniture while others are planning to renovate their existing home space to accommodate office requirements.
But the upsurge in home-working brings certain tax obligations that employers need to be aware of. Read our article here for more information. Situations will vary depending on your business, so please get in touch with the Clayton & Brewill team for further advice.