Could you or your employees claim working from home tax relief? Many people have joined the legions of home-workers in the last twelve months – saving money into the process.
There’s no doubt about it, working from home is much easier in many ways. There isn’t the stress and cost of commuting and you’ll cut down on the cost of food and takeaway coffees. Not to mention buying fewer clothes!
Whether or not you feel you should claim is another matter, as you’re already saving money – possibly a considerable amount.
When Can You Claim Working from Home Tax Relief?
According to the .gov website, you may be able to claim tax relief for additional household costs if you have to work at home on a regular basis. Either for all or part of the week, including because of COVID-19.
But you cannot claim tax relief if you choose to work from home.
Additional costs include things like
- metered water bills,
- home contents insurance,
- business calls
- or a new broadband connection.
They do not include costs that would stay the same whether you were working at home or in an office. Such as mortgage interest, rent or council tax.
You may also be able to claim tax relief on equipment you’ve bought, such as a laptop, chair or mobile phone.
And How Much?
You can either claim tax relief on:
- £6 a week from 6 April 2020 (for previous tax years the rate is £4 a week). You will not need to keep evidence of your extra costs
- the exact amount of extra costs you’ve incurred above the weekly amount. In this case you’ll need evidence such as receipts, bills or contracts
Tax relief is given based on the rate at which you pay tax.
For example, if you pay the 20% basic rate of tax and claim tax relief on £6 a week you would get £1.20 per week in tax relief (20% of £6).
If your self-employment takes up more than 25 hours a month you could claim based on the following agreed flat rates per month or as above, you could work out the additional costs and claim those. The HMRC agreed rates for the self-employed are:
|Hours of business use per month||Flat rate per month|
|25 to 50||£10|
|51 to 100||£18|
|101 and more||£26|
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