CORONAVIRUS has forced millions of Brits to ditch the office and work from home – and you could be cashing in on this.
You could save hundreds of pounds if you apply for tax relief while working from home during the pandemic.
You could be saving hundreds on your tax bill while working from homeCredit: Alamy
Here’s what you can claim:
Tax relief – £125
Workers may be able to claim up to £125 in tax back if they work from home for just one day due to the coronavirus crisis
HMRC is accepting claims for the whole tax year due to the pandemic, and it launched an online tool in October to help you do it.
You can only claim if your employer required or asked you to work from home.
The tax relief covers extra expenses you’re forking out on as a result of working from home, such as broadband, heating and water costs.
The amount of money you get back depends on your tax rate and your employer must have required you to work from home to make a claim.
You can effectively get up to an extra £6 tax-free a week.
People paying the standard level of tax of 20% can get £1.20 a week in tax relief.
While for people who pay tax at the higher rate of 40%, you’d get £2.40 a week.
So claim for the entire 2020/21 tax year and that’s tax relief of:
- £62.40 for basic rate taxpayers
- £124.80 for higher rate tax payers
- £140.40 for additional rate tax payers
Once the application has been approved, the online portal will adjust your tax code for the 2020 to 2021 tax year.
You will then receive the tax relief directly through your salary and will continue to receive the adjustment until April 5, 2021.
This means you won’t get a one off payment, instead it will be included as part of your weekly or monthly payments from your employer.
Martin Lewis said nearly 2million Brits have already claimed the relief, and urged everyone else to get applying too last month.
If you’ve been working from home, then you might have had to kit your workspace out with a few bits of office equipment.
If you’re self employed, you can claim back money on this, under the Annual Investment Allowance.
There isn’t a limit on what you can claim back, but you’ll have to prove to HMRC that the equipment it is used wholly and exclusively for your work.
The money you’ll get back on this depends on what tax bracket you fall into.
So if you bought a computer screen for £100 and you pay tax at the higher rate of 40%, you’ll be able to claim 40% back.
You check if and how much you can claim through Gov.uk
If you’re employed and have been reimbursed on your working from home office equipment, you also won’t be charged any extra tax on these items.
Usually, if you had expensed office equipment from your employer in order to work from home before the Covid crisis, you would have had to have paid a certain amount in tax or national insurance contributions.
But this was scrapped from June last year following the Covid outbreak.
You don’t have to do anything to claim this back – your employer should do it for you and the tax won’t be taken out of your pay check.
If you’ve been given certain benefits from your employer, such as a company car, you’ll have to pay tax on it.
The tax you pay on your company car depends on how much it would cost to buy and the type of fuel it uses.
The amount of tax you pay can be reduced if you have it part-time, you pay something towards its cost, or it has low CO2 emissions.
You can check what tax you’ll usually be paying on it here.
But if you’ve been furloughed, or you’re not using your company car due to the Covid crisis, you could be paying tax on a car that is just being left on your driveway.
To stop forking out on this extra tax cost, you could ask your company if you can hand back the car keys.
What can I claim tax relief on?
THERE are certain things that you can claim tax on under HMRC rules. They include the following:
- Expenses for working from home
- Repairing or replacing small tools needed to do their job (for example, scissors or an electric drill)
- Cleaning, repairing or replacing specialist clothing (for example, a branded uniform or safety boots)
- Business mileage (not commuting)
- Travel and overnight expenses
- Professional fees and subscriptions
This means that HMRC won’t expect you to pay tax on it, as the car is “unavailable” to you – which means that you can’t use the car.
Blick Rothenberg global mobility senior manager Jaye Bailey says this could be a good way to save money.
He says if you are paying £6,000 in tax for your company car, for example, but you hand the keys back over to your employer six months into the tax year, you’ll only be taxed for the six months you used the car – which would total £3,000.
“If people aren’t using their cars and your employer is happy to take their car back, then it could be a very good way to save a portion of tax,” he says.
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