People who work from home for even one day this year can claim tax breaks at increased costs if the consequences of the Covid-19 pandemic persist.
HM Revenue & Customs confirmed to This is Money that the work from the tax relief system will be extended for the entire tax year 2021/22.
Anyone who has been eligible for tax breaks from home in the past year can continue to do so. This means that eligible taxpayers can now apply for tax relief both for 2020/21 and for the current tax year.
The government continues to advise people to work from home if possible, which means that millions of people are likely to be eligible to claim the tax break this year as well.
Extended: HM Revenue & Customs confirms to This is Money that the work from the tax relief system will be extended for the entire new tax year 2021/22
A spokesman for HMRC told This is Money: “Customers can make claims for the entire tax year 21/22, even if they have only worked from home for one day.
“In doing so, however, they have to agree to a declaration form in which they have to prove that the additional costs (such as heating, water meters or business calls) were incurred entirely, exclusively and necessarily directly as a result of working from home.
“They don’t include costs that would stay the same whether they work at home or in the office.
“It is important to emphasize that the employee must perform work that constitutes all or part of the core duties of their employment in order to qualify for the tax break.”
The application process is fairly quick and straightforward and can be completed online through the government website.
You need a Government Gateway user ID and password to make a claim. You can create a user ID if you don’t already have one.
If successful, the entitlement will change your tax code and you should find that your wage package increases slightly when the tax break kicks in.
Here are some of the key points to keep in mind when considering applying to work out home tax breaks:
Am I eligible to work at home on the tax break?
On their website, the government says people can apply for the tax break if they regularly have to work from home all or part of the week.
It adds, “This includes if you have to work from home because of the coronavirus (COVID-19).”
Read carefully: there are rules about what additional costs you can and cannot get the work from home tax breaks for
However, you cannot claim tax breaks if you work from home.
The work of the house tax relief is an individual service. However, if you live with others who have to work from home, they can also apply for tax breaks.
If you fill out a self-assessment form to pay your taxes, you will not be able to use the government’s online microservice to apply for tax break. However, they will be requested through your self-assessment form, whether it is completed online or through the mail.
For what additional costs can I claim the tax credit?
There are rules about what additional costs you can and cannot claim the work from home tax breaks for.
The government says, “The additional costs include heating bills, water bills, home insurance, business calls, or a new broadband connection.
“They don’t include costs that would stay the same whether you work from home or an office, like mortgage interest, rent, or council tax.”
If you are enrolling for the tax break from home, you will need to sign an online declaration stating that the additional costs were incurred because you had to work from home.
How much can you ask for?
There are two possibilities.
For the current tax year you can claim £ 6 per week with no proof or proof of the additional costs you incurred working from home. For most people, this is probably the easiest option.
Alternatively, you can claim the exact amount of additional costs you incur working from home weekly if it is more than £ 6 per week.
To do this, “you need evidence such as receipts, invoices or contracts,” says the government website.
How much tax break do I get?
The amount of tax breaks you get like last year depends on what income tax bracket you’re in, the HMRC says.
If you pay the 20 percent property tax rate and claim tax breaks for £ 6 per week, you will get tax breaks of £ 1.20 per week, which is 20 percent of £ 6.
A taxpayer with the higher tax rate of 40 percent can get £ 2.40 weekly tax relief when claiming an additional £ 6 per week work from home cost.
For the full 2021/22 tax year, the total work from home tax relief would be approximately £ 62 per year for property taxpayers or approximately £ 124 per year for higher rate taxpayers, assuming the £ 6 per week option is selected.
“A welcome step from HMRC”
Nimesh Shah, CEO of Blick Rothenberg, said: “It is a very welcome and early step by HMRC to give people the opportunity to claim the tax break without any problems.
“People will have seen their household bills go up over the last year, of course, because they worked more at home, and it is positive that the government has recognized this.”
He added, “The HMRC microservice site was already up and running, so it makes sense for them to extend the system for this tax year.
HMRC is also likely to be cautious about individuals making standalone work at home claims and the additional time and expense involved in processing those claims this tax year. From their point of view, it therefore makes sense to simply let the system run for another year. ‘
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