Working from home allowance

We suspect that many of you have been working from home over the last few months due to obvious reasons.

Did you know however that by working from home you can save money in tax?

HMRC have a scheme in place which helps you cover the seemingly higher costs of working from home such as increased heating & electricity bills.

How much can I claim?

You are able to claim up to £6 a week by either one of two ways

  1. Your employer can opt to pay you an additional £6 extra per week tax-free, however, this may be unlikely with firms across the country currently struggling.
  2. If your employer does not want to make this available to you, then you can request that this amount is instead deducted from your taxable income.

How can I claim?

HMRC has launched a new online portal where you can submit a claim for the current 20-21 tax year. Your tax coding will be adjusted granting you tax relief on your salary through to 5th April 2021.

CLAIM MY TAX RELIEF

How much relief?

If you are claiming £6 per week you will obtain the following relief depending on what tax band you are in.

Basic rate             (20%)£1.20 relief per week£62.40 per year
Higher rate         (40%)£2.40 relief per week£124.80 per year
Additonal rate   (45%)£2.70 relief per week £140.40 per year

Can I claim for previous years?

You are able to put in a claim for the last 4 years – again HMRC will make adjustments to your tax code or may even elect to give you a refund.

What if my costs are more than £6 per week?

You are able to put in a request for a higher allowance if you believe your total costs incurred whilst working from home, exceed the £6 per week allowance – however, you will need to provide evidence of this and will need to apportion the total cost correctly, which can prove difficult.

What if I only worked at home part-time?

HMRC have confirmed that even if you were only required to work part time during the current year (20-21) you are still able to claim £6 per week for the ENTIRE tax year!

This is a no brainer if you have been required to work at home due to the effects of covid – whilst you will not realise this relief immediately your tax code will be changed to reflect this, ultimately leaving you with more tax-free take-home pay!

You’ll need to have a Gateway ID number to create the claim but if not they are ever so easy to set up!

Again, the link to make a claim can be found below:

MAKE MY CLAIM

If you have any questions about this or how to make a claim please get in touch.

Contact

Matthew Lay PJCO Peter Jarman
Matthew Lay

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