Data from the UK Office of National Statistics shows that nearly 50% of the UK workforce worked from home in 2020, as a result of the coronavirus pandemic. The good news is that those required to work from home due to social distancing rules are eligible to claim back some of the tax they’ve paid. What’s more, is that you can do this even if you only spent a day or two working from home in last tax year.
The idea behind the relief is that the national lockdown(s) forced millions of people who’d normally work on-site in an office or elsewhere to work from home, and thus incurring extra expense such as electricity, broadband, etc…
Keep reading to see who can claim, how much, and how to claim.
Who can claim?
Anyone who has worked from home from 23 March 2020, can claim, even if it was only one day. Normally, you can only claim for the actual days you worked at home, but due to the national lockdown the rules were changed to allow workers claim for the entire year.
The only caveat here is that if your employer has already given extra to cover the expenses from working from home then you aren’t eligible. You also shouldn’t claim if you had the choice of working on site, but chose to work at home of your volition.
How much can I claim?
As always with tax the rate of relief you’ll receive is dependent on your circumstances, though most poignantly it’s based on your current tax rate, and the type of expenses you are claiming for.
Basically you can claim £6 per week for the 2020/21 tax year that ended in on 6 April this year. This £6 figure is also continuing for 2021/22 tax year. That’s £312 per year, of which you can claim back 20% tax or £62.40 for basic rate tax payers, and £140 for higher rate tax payers. You can also claim for the 2019/20 tax year but only the two weeks from 23 March to 5 April, but this is at the rate of £4 per week.
Alternatively, you can add up all of the additional costs you’ve incurred for working from home, then work out tax from that. Useful if your expenditure was particularly high. The caveat here is that you will need receipts or invoices to back up your claim.
How to make a claim?
If your claim is based on the set £6 weekly allowance it couldn’t be easier. The Government has setup a microsite to lead you through the process. This unfortunately cannot be used by those who complete their own tax returns. If you normally complete a self-assessment each year, then you’ll have to wait for that to make your claim. Hopefully there will be guidance on this before the self-assessment dealing on 31 January.
To claim via the microsite you’ll need your Government Gateway ID and password, plus your National Insurance Number and a payslip or P60. Filling the claim should only take about 10 minutes, during which you’ll be asked:
- If you are only claiming tax relief on your expenses for working from home
- Whether of not you complete Self Assessment returns
- If your employer paid your expenses for working from home?
- And did you start working from home because of coronavirus (COVID-19)?
Rather than being paid as a lump sum (which is always nice), once your claim has been approved, your tax code will be altered to take into account the relief. In essence you’ll pay a little less tax each month.
For more information on tax and allowances, see our guide to taxes for those earning additional income.