Tax relief available for UK employees WFH
Back in October 2020, HMRC launched a brand new microservice that meant that even if you had only worked from home for one day during the Coronavirus pandemic, you could be eligible to claim for tax relief.
Martin Lewis OBE has been urging employees around the UK to take advantage of this opportunity via his website, Money Saving Expert, founded in 2003. Martin Lewis wrote an article about this microservice, encouraging those who have worked from home during the pandemic to complete their claim as soon as possible. He explains that the HMRC told him that they;
“recognise that the working-from-home situation is very fluid this year” and are “accepting claims for the full year’s expenses”.
According to the Office for National Statistics, in April 2020, during the height of the Coronavirus pandemic, 46.6% of UK employees did some work from home, and a massive 86% of these people worked from home as a direct result of COVID-19.
HMRC is offering a tax relief of up to £125. Depending on what tax rate you pay, and you could be eligible after only working one day from home since the 6th of April 2020. You can make this claim based on an increase in your heating and electricity costs, water bills, home content insurance, business calls and broadband.
Working from home all day every day, especially during the pandemic, can result in more energy being used than usual, which then results in higher bills. If you are struggling to afford to heat your home, or just need some extra help, there are a number of Government grants that you may be eligible for. These include:
Affordable Warmth and Nest scheme – For those who receive certain benefits, privately rent or own their property. Payments can help with the cost of loft and cavity wall insulation or a new boiler.
Cold Weather Payment – Payments that will help pay for extra heating costs during very cold weather.
Winter Fuel Payment – An annual tax-free lump sum to help pay for gas or electricity during the winter, but what you get depends on how old you are. This is automatically paid to those who receive the state pension.
Fuel Direct – For those who receive certain benefits and are struggling to keep up with energy payments. These payments can be taken directly from those benefits payments in order to pay off any outstanding bills.
Green Homes -Grant Vouchers for up to £5,000 are available for selected home improvements, including insulation.
However, if you’re not looking for a scheme or payment help but would just appreciate a little help with heating your home after being hit financially by the pandemic, there are companies that will offer boiler finance, which may be more of what you’re looking for.
What are you eligible for?
UK employees are entitled to tax relief of £6 a week from HMRC. If you were to complete a claim via the microservice, this is how it would work for you:
Basic 20% tax rate = you will gain £1.20 (20% of £6) a week = £60 a year.
Higher 40% tax rate = you will gain £2.40 (40% of £6) a week = £125 a year.
How do you make a claim?
All you need is your Government User login details and a recent payslip. If you don’t already have a Government ID, you will need to create this before completing the form. Once you have these details on hand, the tax relief form can be accessed via Government dedicated platforms.
“We want everyone to get the money that they are entitled to, so we’ve made the online service as easy to use as we can- it takes just a few minutes to make a claim”
-Karl Khan, Interim Director General of Customer Service at HMRC
How to know if you qualify for the tax relief.
All UK employees who have worked from home, whether it be from the beginning or only one day, during the Coronavirus pandemic, are entitled to make a claim. Other ways to know if you are eligible for the tax relief is if;
- You don’t pay tax by self-assessment.
- Your employer isn’t already paying your extra expenses.
This tax year ended on the 5th of April 2021; however, it has not been confirmed if the microservice will still be available after this date.