Working From Home Tax Relief

HMRC is reminding taxpayers to submit tax relief claims for working from home due to coronavirus during 2021/22 via the easy to use online portal

So far this tax year more than 550,000 employed workers have already claimed and are benefitting from the tax relief, which pays £6 a week for home workers.

If employed workers were told to work at home by their employer because of coronavirus and, as a result, their household costs have increased, they are eligible to claim the working from home tax relief.

HMRC received more than three million claims for the tax relief for the 2020/21 tax year.

Myrtle Lloyd, HMRC’s director general for customer services, said: ‘Half a million people have already reduced their income tax this year by up to £125, by claiming tax relief on their working from home expenses.

‘We want everyone who’s eligible to benefit, so we’ve made it quick and easy to do online. Check if you’re eligible and apply at gov.uk by searching ‘working from home tax relief’.

‘HMRC is continuing to help and support people affected by the pandemic.’

From 6 April 2020, the amount employers have been able to pay tax-free without employees having to provide evidence of an increased bill is up to £6 a week. Employees who have not received the working from home expenses payment direct from their employer can apply to receive the tax relief from HMRC.

Eligible customers can claim tax relief based on the rate at which they pay tax. For example, if an employed worker pays the 20% basic rate of tax and claims tax relief on £6 a week, they would receive £1.20 a week in tax relief (20% of £6 a week) towards the cost of their household bills. Higher rate taxpayers would receive £2.40 a week (40% of £6 a week). Over the course of the year, this could mean taxpayers can reduce the tax they pay by £62.40 or £124.80 respectively.

Once an application has been approved, the online portal will adjust the individual’s tax code for the 2021/22 tax year. They will receive the tax relief directly through their salary until March 2022.

If employees were required to work from home last year but did not claim for the tax relief, they have not missed out; HMRC will accept backdated claims for up to four years. They will receive a lump sum payment for any successful backdated claims.

Accountants will not be able to use the online portal to apply for the relief on a taxpayer’s behalf.