During any periods where you are required to work from home most people will be making a saving on travel costs (train, bus, petrol). We ask you to offset these costs by any additional heating or electricity costs. For the minority of employees who normally walk to work, or do not have any commuting costs for whatever reason normally, we ask you to absorb these costs.
In a situation like this there will always be some people who fare better than others. Whether that is in relation to work levels (some people will be working flat out, others will have less to do), or in relation to the work environment you are in (many people may end up working at a dining room table, some will have a dedicated quiet room), in relation to childcare requirements or in relation to the point about whether you consider yourself out of pocket or not.
If you are required to work from home (as opposed to choosing to do so), you may be able to apply for tax relief.
See this popular blog for more information:
Here is an Update to HMRC’s position on homeworking allowance claims
Homeworking Announcement
On 1 October 2020, HMRC updated its guidance in respect of employees claiming tax relief on their homeworking expenses and is now actively encouraging employees who have not been paid a homeworking allowance from their employers, to make claims directly to HMRC for tax relief.
Where an employer has not made a payment for home-working, employees may have been able to claim tax relief on a £26 per month allowance, so long as HMRC agreed they met the more restrictive conditions for claiming it.
HMRC’s October Employer Bulletin and the Employment Income Manual have both recently been updated, confirming that the conditions necessary for making tax relief claims have now been relaxed and these now mirror the ‘homeworking allowance’ conditions as stated above. Additionally, on 1 October, a new online portal became available to make the process of claiming tax relief more simple. HMRC has confirmed that each claim will be subject to approval and, once successful, the online portal will automatically adjust each applicant’s tax code for the 2020/21 tax year. Employees will receive tax relief directly through their salary for the remainder of the tax year. It should be noted that applicants using this mechanism will need to have a personal tax account, via the Government Gateway.
This concession will only apply for the current tax year and any homeworking claims will not automatically be rolled over into the new tax year. If employees continue to work from home in the next tax year, further claims will need to be submitted.
Remember that if it is your choice to work from home (once restrictions are relaxed) you will not be eligible for this claim.
See here for government guidance
How to claim the tax relief – please note the following tips have been taken from an external source and MVDC cannot vouch for their accuracy or make any representations as to the fact that the claim will be successful
As above if you normally do a self-assessment form, you can claim on it. If not you can complete a P87 form. This can be done through an online P87 form through your Government Gateway account or by filling out a postal P87 form.
You’ll be asked for your employer’s name and PAYE reference (which you can find on your payslip or P60), and your job title. For postal P87s, you’ll also need your national insurance number. The key section for filling in is titled ‘Using your home as an office’ (pictured below). Assuming you’re not eligible for tax relief on other work-related expenses, like uniform tax rebates, leave them blank.
In the online form, there are two boxes:
- ‘Amount paid by you’. HMRC has stated to consumer organisations that provided you’ve had increased costs, just put a total amount that’s equivalent to £6/wk for the period you’ve been working from home and you should not need to show receipts.
- ‘Amount paid to you by your employer’. Here you put £0.
If you’re claiming through the postal form, you’ll need to add a ‘Using your home as an office’ expense manually in the ‘Other expenses’ section.
You claim retrospectively on expenses had. So, if you’re only at home due to coronavirus, it’s best to wait until you’re back at work (or a few months anyway) then make the whole claim at once. Your tax code will likely be adjusted so you pay less tax over the year, as opposed to you getting a direct refund.
Once you’ve submitted the claim, if you do it online you may hear back within a couple of weeks. However, if HMRC is under pressure it may take longer.