Earlier this year, HM Revenue and Customs (HMRC) confirmed it will be accepting tax relief claims for people who have been asked by their employer to work from home for just one day anytime after April 6 for the 2021/22 financial year.
More than 800,000 people claimed the relief, worth between £65 and £127, in the first three months of this tax year and around three million made a claim for the entire 2020/21 tax year.
HMRC says that if anyone has been told to work from home by their employer because of coronavirus measures and, as a result, their household energy bills have increased, they are eligible to claim the working from home tax relief via HMRC’s online portal.
At the time, 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.
“HMRC is continuing to help and support people affected by the pandemic.”
From April 6, 2021, 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 directly from their employer can apply to receive the tax relief from HMRC here.
How is tax relief calculated?
Eligible customers can claim tax relief based on the rate at which they pay tax.
For example, if an employed worker in Scotland pays the basic 20% rate of tax and claims relief on £6 per week, they would receive £1.20 a week in tax relief (20% of £6 a week).
For those paying the intermediate 21% rate of tax and claiming tax relief on £6 a week, they would receive £1.26 a week (21% of £6 a week) towards the cost of their household bills.
Higher rate taxpayers would receive £2.46 a week (41% of £6 a week).
Over the course of the year, this could mean customers can reduce the tax they pay by £62, £65.52 or £127.92 respectively.
How to claim tax relief
To claim for tax relief for working from home, employees can apply directly via GOV.UK for free here.
Once their application has been approved, the online portal will adjust their tax code for the 2021/22 tax year. They will receive the tax relief directly through their salary until March 2022.
How to claim tax break for 2020/21
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.
Check if you’re eligible for the tax break and apply at GOV.UK here.
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