Current government guidelines state that employees should work from home where possible under new restrictions imposed by the second lockdown.
You may be able to claim tax relief for additional household costs if you must work from home either for all or part of the week – including if this is because of Covid-19. However, you cannot claim tax relief if you choose to work from home.
Additional costs include heating, metered water bills, home contents insurance, business calls or a new broadband connection. They do not include costs that would stay the same whether you were working at home or in an office (such as mortgage interest, rent or council tax).
HM Revenue and Customs (HMRC) has already received more than 54,800 claims from customers using a new online portal to allow workers to claim tax relief for working at home.
Employees now need to only apply once to be covered for the entirety of their working from home period.
Whilst you can claim for the exact amount of extra costs you’ve incurred above the weekly amount, this method requires you to submit evidence in the form of receipts, bills and contracts – and means you will have to apportion your heating and electricity costs.
Alternatively, you can claim £6 a week from April 2020 and do not need to keep evidence of your extra costs.
You’ll get tax relief based on the rate at which you pay tax (e.g. if you pay 20% basic rate of tax and claim tax relief on £6 a week, you will get £1.20 per week in tax relief).
Home workers can use the new service here to claim tax relief on working from home expenses.
Once approved, the online portal will adjust an individual’s tax code for the 2020-2021 period.
HMRC is also reminding employed workers that they can also claim tax relief on work-related expenses, including cleaning work uniforms. Employees who clean, replace or repair uniform or tools, or pay fees and subscriptions for their work can apply online directly to HMRC and see whether they are eligible for tax relief on work expenses.
To find out more information, please visit here.
Source: Money Saving Expert and Gov.uk
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