On 14 October 2020, HMRC boasted that in the space of 11 days almost 55,000 individuals made a claim for tax relief on expenses incurred as a result of being required to work from home during the Covid-19 pandemic. These claims could well rise in the coming weeks as more people are required to work from home again due to the current lockdown.
An online portal was set up on 1st October to process tax relief on additional expenses for employed workers who have been asked to work from home by their employer to help stop the spread of coronavirus.
Employers have been able to pay employees up to £6 a week tax-free to cover additional costs since the 6th April, if they have had to work from home. Employees can apply to receive the tax relief from HMRC.
If you are eligible, 20% basic rate tax payers, can claim tax relief on £6 a week meaning 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 can also 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.
If your application is approved, the online portal will adjust an individual’s tax code for the 2020 to 2021 tax year. You will receive the tax relief directly through their salary and will continue to receive the adjustment until March 2021. If you apply once the 2020/21 tax year has ended you can apply for a lump sum.
You do not need to prove your bills have increased unless you are claiming above the flat rate of £6 per week, in which case evidence of the increased costs may be required.