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26/02/2021

Working from home due to COVID? You can claim tax relief

If you have had to work from home due to the coronavirus pandemic – even for one day – you will be eligible for tax relief from the government. According to the Money Saving Expert’s Martin Lewis, you could claim either £60 or £125 worth of tax relief and, as of February 2021, two million people have already claimed!

For the vast majority of the last 12 months, companies have been instructed by the government to encourage their employees to work from home if they are able to. The Office of National Statistics (ONS) reported that almost half (46.6%) of the working population worked at least one day from home in April 2020, with 86% of those declaring that it was due to the coronavirus pandemic. If you were one of those people, you will be eligible for tax relief.

How do I claim?

It’s simple, quick, and you can do it all online! HMRC launched a new microservice that will guide you through a list of questions to see if you are eligible to claim tax relief; there are, however, a few conditions:

You can only claim expenses for working from home
You cannot pay your tax through self-assessment forms
You cannot have had your home expenses paid for by your employer
You have worked from home only because of the coronavirus pandemic (you cannot claim if you have chosen to work from home)

You’ll need to answer a few questions confirming that you fit the criteria above and, if you find that you are eligible, you’ll be directed to an online form to start your tax relief claim - you’ll need to have a Government Gateway user ID, but if you’ve not got one, you can create one easily by following the link on the government site.

How much will I receive?

You’ll be eligible for either £60 or £125 worth of tax relief depending on your existing tax code. So, if you’re on a lower tax code i.e., you pay 20% tax, you’ll be eligible for £60 tax relief for the year; if you are a higher-rate taxpayer, you’ll receive tax relief of £125 for the year. You won’t receive a cheque or a lump sum from the government, your tax code will simply be altered meaning you’ll pay less tax each month moving forward, so you’ll take home a little more.

If you feel that you are spending more than this due to increased gas and electric bills, or your business calls have been added to your private phone bill, you may be eligible for higher tax relief, but you will have to provide evidence of this such as receipts, bills, or contracts.

If you are self-employed and have had to work from home, too, you can still receive some form of tax relief; you’ll find extensive information relating to this here: https://www.gov.uk/expenses-if-youre-self-employed

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