Citizens Advice Salford

Tax Refund for working at home:

One of the greatest changes for many of us over the last months as we respond to the COVID-19 crisis has been that of working from home. This is also proving to be more expensive during the winter as we need to use more energy to heat our homes than might have been the case previously. If you are required to work from home – even if not on a full-time basis, you should be entitled to an additional tax allowance. During the periods of lockdown this applies to many more of us than usual. It takes about ten minutes to claim what ought to be an extra £60 or £120 odd in your wage packet over the year.

The value of the additional allowance is £6 a week from April 6, 2020, or £312 a year. The actual tax relief is calculated at your higher rate of tax, so for an ordinary tax payer who pays tax at 20% this represents £62.40 a year, (or £1.20 per week, i.e. 20% of £6) and for higher rate tax payers, who can claim 40% of the allowance, or £124.80 a year. The allowance is available to self-employed people, through your self-assessment tax return. It’s possible for self-employed people to claim additional costs against tax.

For this year, because of COVID-19 HM Revenue and Customs (HMRC) have said that “We recognise that the working from home situation is very fluid this year, so we’re accepting claims for the full year’s expenses. That includes even if people have only worked from home for some of the year, to avoid needing to contact us if you have to work from home again” (quoted by Martin Lewis).

You need to make your claim via the HMRC ‘working from home microservice’ – via the website. To do this you will need to have signed up for a Government Gateway ID first – which takes about 10 minutes to do, and once done will allow you to keep track of tax, national insurance and your pension forecast. You will need a range of documents to prove your ID. It is though, still possible to claim by post by using form P87 which you can print off from the government website.

The allowance is generally paid via your tax code, meaning your tax code is increased so you are taxed on less of your income.

For any problems call the HMRC helpline on 0300 200 3300.

Tom Togher

Citizens Advice Salford.