Employers can pay employees up to a maximum of £6 per week tax-free, to cover additional costs they may have incurred because of working from home. Where employers have not paid their employees the home expenses payment, individuals can claim this tax relief through a new online portal.
More than 54,800 claims have been made between 1 and 11 October 2020.
The new online portal was launched on 1 October 2020. It allows employed workers to process tax relief on additional expenses where they have been instructed by their employer to work from home to help in stopping the spread of coronavirus. Any employees who have not received the working from home expenses payment directly from their employer can use this portal to receive the tax relief from HMRC instead.
The tax relief is calculated at the rate at which they pay tax, so for employed workers who ordinarily pay the basic rate of tax of 20%, they would receive £1.20 a week in tax relief to help towards their household bills. Any individuals paying the higher rate of tax at 40% would receive £2.40 a week. Over the duration of a full year, this means that employees could reduce the tax they pay by £62.40 (20% taxpayer) or £124.80 (40% taxpayer).
If an application is approved, then the online portal will adjust the individual’s tax code for tax year 2020/21. This means that the employee will then receive the tax relief directly on their salary and will continue to receive the adjustment until March 2021.
The Interim Director General of Customer Services at HMRC, Karl Khan, commented:
“We want everyone to get the money that they are entitled to, so we’ve made the online service as easy to use as we can – it takes just a few minutes to make a claim.”
Employed workers, for example, healthcare workers and care home staff are also being reminded that they also have the option of claiming tax relief on work-related expenses, including cleaning their work uniforms.
Any employees who clean, replace or repair either uniform or tools, or pay fees and subscriptions for work, can check to see if they are eligible for tax relief on work expenses, and get an instant decision, by applying online directly to HMRC.