Interactive Investor

Millions of home workers missing out on tax break

You could get £6 a week – or £312 a year – in relief if you’ve been forced to work at home.

10th March 2021 15:56

by Marc Shoffman from interactive investor

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You could get £6 a week – or £312 a year – in relief if you’ve been forced to work at home.

Employees could be missing out on hundreds of pounds of money back from the taxman as a result of the shift to remote working during the pandemic.

Many workplaces closed during the pandemic due to lockdown restrictions, meaning many people have had to work from home, with accompanying higher electricity and heating bills.

But HM Revenue & Customs (HMRC) does offer tax relief to cover home working.

It allows employers to pay employees £6 a week tax-free, or you can apply directly to HMRC through its online portal.

This covers the extra energy, broadband and phone costs you may face when working at home, which could come to £312 over the year.

It does 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.

Research by the i newspaper has found just two million people have so far applied directly for the relief.

But around 11.6 million of the country’s 32.4 million workforce are working from home, suggesting many are unaware of the relief.

Finn Houlihan, managing director at advisers ATC Tax, says there is low awareness of this tax break.

Houlihan says: “Claiming this relief is a straightforward and simple process that can be completed quickly online.

“As a first step, workers should check with their employer to see if they have already changed their tax code for them.

“If they haven’t, they can apply directly by setting up an HMRC account online, adding in information about how long they’ve been working from home for.”

Houlihan says it may be worth speaking with a tax adviser if employees or employers are unsure.

He adds: “It’s an easy win that could make a significant difference for many individuals, helping towards household bills or other costs.”

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