So far this year, over half a million individuals have claimed tax relief on working from home. When your household costs go up, HMRC has made it quick and easy to claim via their online portal ...
What does this tax relief mean for you when you work from home? Well, you can reduce your Income Tax bill this year by up to £124.80 for working from home expenses. This is usually because of an increase in electricity bills, heating and possibly different home insurance you need to cover.
So, HMRC continues to support individuals with the working from home tax relief. From the 6th of April 2020, it equates to £6 a week, which doesn't sound like much, but anything that can reduce an individual's tax bill can only be a good thing.
This is normally accounted for on the payroll, but if you're not processing this useful tax relief for your employees, they can claim it themselves directly from HMRC.
It is based on their tax rate:
- 20% basic rate taxpayers can claim £1.20 a week (20% of £6)
- 40% higher rate taxpayers get £2.40 a week (40% of £6)
This reduces their tax bills by £62.40 or £124.80, respectively.
HMRC has said it will accept backdated claims for up to 4 years, so if you didn't make a claim last year, they'd send you a lump sum payment for any successful applications.
Employees must register and claim themselves via the Government Gateway.
If you feel inspired to find out more about anything I've said here, do call me on 01908 774320 or leave a comment below and I'll be in touch as soon as I can.