During the pandemic, employees required to work from home have been able to claim tax relief for additional costs, if these are not reimbursed by their employer.
Tax relief for the year to 5 April 2022 tax year is also available and you may like to bring this to the attention of relevant members of staff. They should be aware that they must make a new claim for this, even if they claimed tax relief in 2020/21: the old claim does not carry forward. Relief should apply to the whole tax year, regardless of whether staff are brought back to the workplace during the year, so long as they have at some point been required to work at home. Staff who didn’t get round to claiming tax relief last year haven’t lost their opportunity. HMRC will accept their claim for this period for up to four years.
To recap: employees can claim tax relief on up to £6 per week, or £26 per month, to help with additional costs if they are required to work from home because of Covid-19. Tax relief is based on the rate at which employees pay tax. Someone paying 20% basic rate tax, claiming relief on £6 weekly, would get £1.20 in relief weekly (20% of £6). Higher rate taxpayers would get £2.40 weekly (40% of £6). With devolved taxation, calculations will be slightly different in Scotland. The relief applies to costs like business phone calls and heat and light for the workspace, but not the purchase of office equipment or furniture. Different provisions apply here.
Employees should be directed to HMRC’s online portal on gov.uk. HMRC advises that they search ‘working from home tax relief’ to find it. The portal checks eligibility and accepts an online claim through Government Gateway there and then. Alternatively, if someone usually completes a self assessment tax return, they will be re-routed to claim there. The gov.uk service is easy to use and employees are well recommended to claim themselves, rather than use a commercial repayment service charging a commission.
Information for readers: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.