The impact of COVID-19 has meant many of us have had to make significant adjustments to our home and work lives. The lines between the two have become blurred in many instances and working from home has become the new normal.
If that applied or still applies to you, then you may be eligible to claim tax relief for the increased costs, eg, heat or electricity. This applies to tax years 2019/20, 2020/21 and 2021/22.
To claim the tax relief, you must have and declare that you have had, specific extra costs due to working from home.
However, calculating specific increases in costs, such as heating and electricity, can end up difficult. Due to that, HMRC have introduced a flat rate of £6 a week, available to claim without the need for any receipts or calculations.
£6 per week tax relief with no receipts needed
This means that either;
- Your employer can pay you an extra £6.00 per week allowance completely tax free
Whilst this is technically possible, most employers are struggling for funds at the moment so very few are offering this allowance to their employees.
- You can claim £6.00 per week tax relief from HMRC
If you are incurring additional costs due to necessary working from home, but your employer is not prepared to pay them. Then you can ask HMRC for the amount to be deducted from your taxable income.
Tax relief of £6 a week equates to
£1.20 per week for a basic 20% taxpayer (£62.40 per annum)
£2.40 per week for a higher 40% taxpayer (£124.80 per annum)
What if you have costs higher than £6 per week
If you believe you have higher costs than £6 per week, you can claim more.
In order to do so, you will need to provide evidence of the cost increases and must be able to apportion these extra costs specifically to the fact you are working from home. This is a much more difficult task and can result in HMRC challenging your calculations and apportionments.
How do you claim?
If you already file a self-assessment tax return each year, you can claim the allowance when filling in your self-assessment form. You need to complete the box titled 'Other expenses and capital allowances' in the employment section of the return.
Anyone else can claim the expenses via the HMRC expenses microservice. To do so, you will need a Government Gateway ID. If you don't have one, you can set one up during the process.
Once logged into HMRC, follow the steps through and make a claim for any tax years where you have been required to work from home.
Even if you started working from home at the very end of March 2020 when the first lockdown started, you can put that date down and you will be given the tax relief for the whole of 2019/20.
Can both yourself and your partner claim?
The tax relief is applied on an individual basis so if you and your partner were both required to work from home due to COVID-19, then you can both apply for the tax relief.