How to Claim Tax Relief for Working From Home in the UK

The provision of tax relief for individuals who work from home has emerged as a prevalent aspect of the contemporary work environment. With the advancements in technology facilitating seamless connectivity with peers and customers, an increasing number of individuals are capitalising on the benefits of working within the comfort of their own premises. 

Nevertheless, there are ancillary expenses linked to maintaining a home office, such as heating, lighting, and internet charges, which are frequently not reimbursed by employers.

In this blog, we’ll explain everything you need to know about Working From Home Tax Relief, including how to check if you’re eligible and how to claim it.

What is Working From Home Tax Relief?

Working From Home Tax Relief is a scheme set up by HMRC that allows eligible employees to claim tax relief on the additional costs of running their office from home. This includes things such as heating, lighting, and internet bills, as well as other work-related expenses such as stationery. 

To be eligible for this tax relief scheme you must have incurred additional costs as a result of working from home due to the coronavirus pandemic. 

The tax relief is available for the 2021/22 and 2022/23 tax years, and you can claim up to £6 per week in tax relief. This means that if your expenses exceed this amount, you will still be able to claim the full £6 per week in tax relief. 

It should also be noted that you cannot claim tax relief if your employer covers the added expenses you incur from working from home. 

How does the relief work?

The government has introduced tax relief for those who are now having to work from home due to the coronavirus pandemic. This relief helps with additional costs related to setting up and running a workspace at home. The relief is in the form of a flat-rate expense allowance, which covers certain expenses such as electricity, heating, and broadband. 

The relief is for all those employed and self-employed people who are working from home due to coronavirus. It does not matter if the employer offers no additional financial help with costs related to running a workspace at home. 

This means that you can still claim tax relief even if your employer does not reimburse any of these expenses.

Let’s take a deeper look; how Working From Home Tax Relief works:

How to Claim Tax Relief for Working From Home in the UK infograph

Calculate your expenses – Work out the costs of having a workspace at home. This should include any electricity, heating, or broadband you have to pay for as part of your work from home setup.

Make a claim – You can either make a one-off claim for the year or make regular weekly payments throughout the year.

Receive tax relief – The amount of tax relief is calculated for you and will depend on your individual circumstances. You can receive up to £6 per week or £26 per month. 

The working from home tax relief is a great way to offset some of the costs associated with setting up and running a workspace at home. It’s important to remember that you must keep records of any expenditure related to your workspace in order for HMRC to accept the relief. 

How much tax relief can I get for working from home?

The tax relief working from home is a flat-rate expense allowance of £6 per week. This means that you can claim up to £312 in a year, regardless of how much your actual costs were. This allowance helps to cover the additional costs related to setting up and running a workspace at home. 

The tax relief is available to all employed and self-employed people who are working from home due to the coronavirus pandemic. It does not matter if your employer does not offer any financial help for these costs, you can still claim the allowance.

If you claim £6 per week, this equates to £312 a year, which, depending on your tax rate, can save you money. For example, if you pay the basic tax rate of 20%, your actual savings will be £1.20 a week or £62.40 a year. If you pay the higher tax rate of 40%, your actual savings will be £2.40 a week or £124.80 a year. 

How to Calculate Your Eligibility for Working From Home Tax Relief

Once you have collected all the necessary evidence, you can calculate how much tax relief is eligible for. Firstly, work out how many weeks you were required to work from home due to coronavirus. 

If this was more than one week but less than 52 weeks, then multiply the number of weeks by £6, which will give you the amount of tax relief that you are eligible for. However, if it was more than 52 weeks, then calculate this as 52 x £6 = £312.

Finally, deduct your total claim from your income to calculate the amount of tax relief that you can claim in a year. 

How to Calculate Tax Rebate for Working from Home in the UK

When you claim tax relief for working from home in the UK, you may be eligible for a tax rebate from HMRC. This rebate is essentially a refund of the tax you’ve overpaid, and it can provide some much-needed financial relief. To calculate your tax rebate, you’ll need to provide evidence of the expenses you’ve incurred while working from home. 

HMRC will then calculate your tax rebate based on your actual expenses or the flat rate allowance you’ve claimed. It’s important to note that the tax rebate may take some time to process, so it’s best to be patient and follow up with HMRC if you haven’t heard back within a reasonable time frame.

How do I claim the work from home tax relief?

Once you have calculated the amount of tax relief that you are eligible for, you can make a claim through your self-assessment tax return. 

Make sure to include all the necessary evidence to support your claims, such as receipts and invoices for any additional costs incurred while working from home. HMRC may ask for further information if you make a claim for more than the flat-rate allowance of £6 per week. 

Be sure to keep all your records in order so that you can prove your claim is valid if asked by HMRC. 

By claiming the work from home tax relief, you can save yourself money on additional expenses incurred due to having to work from home. Take advantage of the relief available to make sure you are not out of pocket and get the most out of your tax return! 

What evidence do you need to provide to make a claim?

To make a claim for this tax relief, you must keep records of all the additional costs that were incurred by having to work from home. These will be needed to provide evidence if requested by HMRC. 

It is important to keep receipts and invoices for any expenses such as electricity, heating, broadband, or office furniture which have been purchased. If the costs are part of an existing bill, then make sure you keep a copy of this as well.

How much you can claim?

The tax relief covers £6 for each week that you worked from home. This allowance is not dependent on the number of hours that you worked from home or how much your actual costs were. The maximum amount of tax relief that can be claimed in a year is £312, which equates to 52 weeks (52 x £6).

Conclusion

Working From Home Tax Relief is a great way to save your money and ensure that you are not out of pocket due to working from home. By keeping all the necessary evidence, you can make sure that your claim is valid and get the most out of your tax return. This work from home allowance helps to cover any additional costs related to setting up and running a workspace at home, up to a total of £312 per year.

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