From 6 April 2020, employers have been able to pay employees up to £6 a week tax-free to cover additional costs if they have had to work from home.
But now, employees who have not received the working from home expenses payment direct from their employer can apply to receive the tax relief from HMRC.
Launched on 1 October 2020, the online portal has been set up to process tax relief on additional expenses for employed workers who have been told to work from home by their employer to help stop the spread of COVID-19.
Employees can now claim the tax relief for working from home directly through GOV.UK working at home. Here you will be asked questions to confirm your eligibility and make your claim.
Are you self employed?
Please note that this portal is available only for individuals paid by their employer via PAYE. For the self employed and those completing self assessments, working from home expenses can be claimed in the usual manner and you can read our article explaining this in further detail here.
What can I claim?
Eligible taxpayers can claim tax relief based on the rate at which they pay tax. For example, if an employed worker pays the 20% basic rate of tax and claims tax relief on £6 a week, they would receive £1.20 a week in tax relief (20% of £6 a week) towards the cost of their household bills.
Higher rate taxpayers would therefore receive £2.40 a week (40% of £6 a week). Over the course of the year, this could mean taxpayers can reduce the tax they pay by £62.40 or £124.80 respectively.
Once the application has been approved, the online portal will adjust an individual’s tax code for the 2020/21 tax year. The employee will receive the tax relief directly through their salary and will continue to receive the adjustment until March 2021.
Rachael draws on over a decade of experience in tax to provide personal tax services and advice to families, company directors, and owner-managed businesses.