Martin Lewis: How to claim tax relief if you’re working from home

If you’re an employee who’s had to work from home even for just a couple of days you could be owed an easy up to £280 by HMRC. That’s because it’s now confirmed that if you’ve had to work from home during the pandemic, and had extra costs, you can get relief for the entire tax year. 

If you’re an employee who’s had to work from home even for just a couple of days you could be owed an easy up to £280 by HMRC.

I understand that sounds a bit goobledegooky, so let me take you through it…

It’s always been the case that if your employer has required you to work from home, and you’ve had additional costs because of it (eg heating) then you’re able to claim for these increased costs – known as the working from home (wfh) tax relief.  

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For far more help on this see my www.moneysavingexpert.com/WFHtaxrelief guide, yet in brief, to claim the tax relief you must have, and declare that you have had, specific extra costs due to working from home. Yet apportioning extra costs, such as heating and electricity, is tough. 

Due to that, there is a flat rate of £6 a week available to you, which you can get either…

-An extra £6/week tax-free from your employer. They don’t have to give you that, and in fact most employers aren’t giving it as they are most likely struggling.

If you’re not getting that from your employer, then you can get £6 tax relief. To make the process easy, HMRC says for claims in line with the employers’ payment (ie, £6 a week), you won’t need receipts or prove information (if you have bigger expenses and want to claim more, you would need to prove it).

The tax relief of £6 a week equates to a gain of…

£1.20 a week for a basic 20% rate taxpayer (£62.40 a year)

-£2.40 a week for a higher 40% rate taxpayer (£124.80 a year)

£2.70 a week for a top 45% rate taxpayer (£140.40 a year).

If you’re not the only employee in the house who’s been required to work from home, and it’s fair to say that costs have increased specifically from each individual working from home, you can all each claim it.

During the 2020 lockdown as millions of UK staff were required to work from home temporarily – HM Revenue and Customs (HMRC) changed the way the working from home tax relief operates.

Previously, you could claim the working from home tax relief for each week you were required to work from home. Yet in October 2020 it launched a ‘microservice’ which, even if you only needed to work from home for ONE day and had extra costs, you automatically got the WHOLE tax-year’s relief.

And a few weeks ago, as the new 2021/22 tax year started on April 6, HMRC decided to continue that microservice for 2021/22 too – which means many can now claim TWO year’s worth of relief – worth up to £280.

To process claims, most employees (including part-timers) can use the microservice at www.Gov.uk. The exception to this is if you do a self-assessment tax form, in which case you can still claim but it’s a different route – see my www.moneysavingexpert.com/WFHtaxrelief guide for help.

To use the microservice you need a Government Gateway ID. If you don’t have one, you can set one up along the way. You’ll also be asked if you’re claiming any other work-related expenses. So, if you wear a uniform to work, do read about the www.moneysavingexpert.com/reclaim/uniform-tax- refund as you may be able to claim that too.

Required to work from home at any point between April 6, 2020 and April 5, 2021? If so and you had higher costs due to it, and you haven’t claimed yet, you can still do that via the microservice.

In fact, if you started working from home at the start of the first lockdown, on March 23, 2020, just put that date in too. Do that and you’ll get a refund for the whole of the last tax year (which started on April 6, 2020) and two weeks’ extra on top.

Payment for these past tax years will be via a cheque/Bacs.

Required to work from home at any point from April 6, 2021 up to April 5, 2022? If so and you have higher costs due to it, you can claim via the microservice too. If also claiming for the last tax year (2020/21), you can do both at once. If you’ve already claimed for 2020/21, you must claim again for the 2021/22 tax year, via the same microservice.

Martin Lewis is the founder of MoneySavingExpert.com.

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