As you know, tax treatment relates to the specific circumstances of the individual and may change in the future. In previous years, because of the Covid lockdown, about 60% of British workers continued working from home. While some people go back to work as the lockdown may have ended, others prefer to work from home due to sickness, social distancing measures, or budget cuts. The expense of working from home rather than the office can rapidly increase. Yet, those who are in this situation can ask for work from home tax relief.
For example, the UK government provides a tax rebate to home workers. Here you can read about all points you need to know about working from home tax relief and how to claim for working from home.
What is the working from home tax relief?
If you decide to work from home, it might cause you an increasing cost of electricity, water, internet, and phone bills. This is one of the reasons why the UK government offers home tax relief for those who work from home and wants to compensate for the rising costs.
The tax relief of each year might be up to £125, but if you want to find the exact amount, you have to consider your current tax bracket. When you claim tax for working from home, you can use the tax relief that offers a reduction of up to £6 per week of expenses. Also, you can claim tax working from home relief for the additional household costs. But to do so, you need some claim working from home evidence such as bills or receipts. Working from home tax relief can reimburse for any costs directly connected to your work, but it will not provide your entire bill.
How to claim my working from home tax relief?
If you are working from home and want to know how to claim tax relief for working from home, continue reading. If you did not ask the compensation for at-home work payments from your employer, it is time to claim work from home tax relief from HMRC. If you like claiming tax relief for working from home, use the online portal. Or you can ask for the tax relief as a piece of your annual tax return.
The good point is that you should not currently work from home to obtain tax relief. If you were forced to work from home during the pandemic duration can claim for the added costs. Now, you can claim tax back for working from home from HMRC and receive a lump sum instead of monthly payments. Pay attention that the tax relief is available for all the UK employees who work from home. It means that you can make work from home claims even if you worked at home just for one day a week. Once they accept your application, HMRC will modify your tax code, and you will obtain the relief right in your salary until March 2022. You should not show evidence claiming for working from home unless you apply for more than £6 per week of tax relief.
How much is the working from home tax relief?
Before claiming for working from home and claim tax relief for your job expenses, you might like to know about this tax relief rate. As an employee who works from home, you can ask for at most £125 per year. It means £6 for each week, which the government has offered workers from home since April 6, 2020. But if there are any extra costs incurred exceeding the weekly amount, you have to prove it with the evidence. The UK government computes the Tax relief based on the rate you pay tax. For example, if you pay 20 percent of the basic tax rate and commandeer tax relief of £6 a week, you could earn £1.20. In this situation, the tax relief of each week is 20 percent of £6, which would result in £62.40 a year. Or you can claim for the higher rate of tax about £2.40 a week (40 percent of £6 a week) and get £124.80 a year.
How to find out if I’m elgible for the working from home tax relief?
Claiming work from home expenses is available when you work from home for significant periods on a full- or part-time basis. To get working from home allowance, you must:
- Ask for a legal agreement from your employer to direct you to work from home.
- Be required to serve important tasks of the work at home.
- Work for significant periods at home
- Use a work computer to work remotely
- Send and receive emails, data or files remotely
- Develop concepts, outcomes, and services remotely
If you bring work home from the office outside of normal working hours like evenings or weekends, you can not ask for tax relief.
If you are working from home and thinking about applying for working from home allowance, read the above text. There, you can find beneficial information about how to claim working from home allowance, and claiming tax relief for working from home.