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Workers can claim up to £250 tax relief for working from home (WFH), towards a year for extra costs during the pandemic – our blog advises how, before it’s too late!
The tax relief existed before the pandemic and cost the Treasury about £2million a year since it was created in 2003.
But with the pandemic and working from home guidance in place, the cost has increased to £500 million a year for the Treasury.
Chancellor Rishi Sunak is looking to close the loophole as a result. But there is still time to claim if you haven’t already.
Can I ask for tax relief for WFH?
Yes, you can ask for task relief for extra costs such as electricity bills, internet and more when working from home. Fortunately, you still have more time before this loophole closes, as the termination date is not clear yet.
Over a year, you can claim up to £62.40 for basic-rate payers and £124.80 for higher earners. You can claim back up to two-years-worth, making the relief worth up to £250 depending on your income.
You can claim working from home tax relief if you have to work at home on a regular basis, either for all or part of the week. This includes if you have to work from home because of Covid.
The tax relief is designed to help with costs including:
- gas and electricity
- metered water
- business phone calls
- internet access
HMRC doesn’t take these specific costs into account when calculating how much you’ll get however. Instead, you will get the fixed amount depending on your income tax bracket.
Claimants are eligible for the full tax break even if they only ended up working at home for one day in the year, as the rules have been relaxed thanks to the pandemic.
According to HM Revenue & Customs, 4.9 million people have successfully claimed the tax break since March 2020.
How can I ask for working from home tax relief?
You can check if you can claim tax relief, on the government website. To claim these expenses, you’ll need to create or log into your Government Gateaway user ID.
You’ll need to present basic identity information such as passport, National Insurance number and pay slips in order to get the relief.
While there is no clear indication of when the tax relief will be scrapped, Sunak is delivering his Spring Statement on 23 March, when it would likely be announced if it’s going to happen. Often in that case changes will be applied at the end of the tax year on 5 April.
Dana is a former reporter at Mouthy Money, having previously worked for Times Money Mentor and the BBC.