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 ...
Working from home means you can save on your tax bill!
HMRC recently said that roughly 550,000 employed workers are already benefitting from claiming this tax relief after their employers sent them all home during the Coronavirus pandemic.
"But HMRC is processing over 3 million claims!"
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.
Until next time ...
ROGER EDDOWES Business Godparent
Would you like to know more?
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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