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Working from home relief – (Emma Reid)

What is working from home relief?

If you have been working from home on a regular basis, due to the Covid-19 restrictions, you may be entitled to a small amount of relief for the additional household costs.

Additional costs, according to HMRC, include expenses such as heating, metered water bills, home insurance, business calls or a new broadband connection but will not include costs that would stay the same, for example mortgage interest, rent or council tax.

How does it work?

If you have regularly worked at home, you can claim for each applicable week.

There are two ways to calculate how much you can claim.

You can either claim £6 per week from 6 April 2020 and you will not need to keep any evidence of extra costs.

If you know that your weekly costs are over the £6 a week you can claim the exact amount of extra costs.  However, you will need evidence for these figures, such as receipts or bills.

You may also be able to claim tax relief on equipment you have purchased to facilitate working from home such as a laptop, desk chair or mobile phone.

What does this mean for you?

This relief will reduce the tax you have to pay and the amount of relief you receive will be based on the highest rate of income tax applicable to you. The table below shows the amount of tax you save if you claim working from home relief of £6 a week.

Tax Rate (20/21 tax rates)  Weekly Relief (assuming £6/week claimed)
Basic Rate (20%)£1.20
Higher Rate (40%)£2.40
Additional Rate (45%)£2.70

This relief would be multiplied by the number of weeks that you worked from home between the 6 April 2020 and 5 April 2021.

How to claim?

To see whether you are eligible

This is not financial advice, please get in contact with one of our tax specialists at Freedman Frankl & Taylor Chartered Accountants to find out how we can help you with your tax.

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