People who work from home could claim tax relief of up to £280
Millions of workers across Britain have started working from home during the coronavirus pandemic.
However, many of them could be missing hundreds of pounds. Anyone working from home could be eligible for tax relief of up to £280 for two tax years.
Although the working from home tax relief has always existed, the government has made it easier for people to claim their money since the start of the covid outbreak. HMRC has launched a simple microservice to allow employees to claim.
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With the cost of living rising, such as rising energy prices and National Insurance hikes for example, now is the time to claim what is rightfully yours. The Money Edit has provided a guide to everything you need to know about claiming government tax relief.
How much tax relief for working from home will I get?
The amount you get will depend on your tax rate. Here’s what you might get:
*Taxable at basic rate (20%) – you can claim £1.20 per week/£62.40 per tax year
* Taxpayer at the highest rate (40%) – you can claim £2.40 per week/£124.80 per tax year
*Additional Rate Taxpayer (45%) – you can claim £2.70 per week / £140.40 per tax year
HMRC will allow you to backdate the claim for the 2020/21 tax year, so including that and that year’s refund you could recover up to £280 if you are an additional rate taxpayer, £250 if you are a higher rate taxpayer and £125 if you are a basic rate taxpayer.
How can I claim the tax reduction for working from home?
HMRC has set up a dedicated online site through which to make your complaint. Before you can continue, you will be asked a number of questions to assess your eligibility.
You will need your Government Gateway username and password. If you don’t have one, you can create one in around 10 minutes, according to HMRC, as long as you have your national insurance number ready and some form of identification such as a valid UK passport or ID card. recent pay.
Am I entitled to a tax reduction for working from home?
Not everyone is entitled to homework assistance. The key point is that your employer must have told you to work remotely – it cannot have been your own decision. There must also have been a negative impact on your household expenses, such as bills going up due to using the internet more than usual or having the heating turned on at times when you would normally be at home. office.
If your company is already covering these additional expenses or paying you home working allowance, you cannot double down by also making a claim with HMRC.
Those paying tax through the self-assessment system will need to apply through their tax return for the relief and not through HMRC’s online portal.
How do I qualify for the work from home tax reduction if I pay taxes by self-assessment?
If you file a self-assessment tax return, you cannot use the microservice, but you can still claim.
When you complete your tax return online, fill in the “other expenses and depreciation” section in the employment section.
For paper returns, you will find it in section 20 of the full return form and in section 2.5 of the short form.
How is telecommuting paid?
How you are paid depends on the year you are applying for. If your application has been approved for relief to cover the 2020/21 tax year, then you will receive all you are entitled to as a lump sum in your salary. For the 2021/22 tax year, HMRC will adjust your tax code to reflect in your salary that you owe less tax each month.
If you pay tax through self-assessment, your total tax payable will be adjusted accordingly.
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