Millions of workers have failed to claim work at home from the tax breaks introduced during the pandemic, despite new guidelines to avoid the office when omicrons are spread.
So far this tax year, only 1.6 million people have taken advantage of the new relief, which is worth up to £ 120 a year for a higher rate taxpayer. That’s nearly half of the 3.1 million people who claimed it last year, according to the numbers Telegraph Money received from HM Revenue & Customs.
The tax office said five million people were eligible to request the break when it was first presented at the start of the pandemic.
It allows employers to pay workers up to £ 6 tax-free per week to cover additional costs when they have to work from home due to Covid restrictions. If workers do not receive a £ 6 allowance from their employer, they can still benefit from the tax break.
Employees can claim the full annual amount even if they only worked at home one day a year. This means there are now many more eligible after Boris Johnson urged the nation to work from home whenever possible in the face of increasing cases.
If you missed the relief in the previous year at the beginning of the pandemic, you can still benefit from a retrospective application.
How does it work?
Employees paying Basic Income Tax can claim a tax reduction of £ 1.20 per week – 20 percent of £ 6 – on the cost of their household bills. Taxpayers with the higher tax rate of 40% can claim £ 2.40 per week. Over the course of the year this adds up to £ 62.40 for basic payers and £ 124.80 for high earners, or doubles if requested for the previous year.
Employees can submit applications via the HMRC online portal. Employees are not required to provide evidence that their bills have increased unless they apply for a tax break on expenses above the flat rate of £ 6 per week. This option is usually intended for the self-employed who typically have higher expenses and who may require proof of the increased costs.
The flat-rate relief extends over the entire tax year, so regardless of how many days you worked at home or in the office, you get the same amount.
Can I still apply?
The tax exemption should only be a temporary measure due to the pandemic and should expire in March 2021. But the government has extended the tax break to the 2021-22 tax year, and anyone working from home can apply until April 2022.
HMRC hasn’t ruled out another extension of the discharge for the 2022-23 tax year, but sources said it was too early to make a decision.
The tax credit does not extend to new tax years. Anyone who submitted an application in the last year must therefore submit a new application in order to receive benefits again.
Once employees have submitted an application and the online application has been approved, HMRC will adjust the tax codes for the 2021-2022 tax year. The employee receives the tax relief directly from his salary.
A spokesman said: “We recognize that the home office situation is very fluid at the moment, so we are accepting demands for the entire year. This also applies if people only worked from home for part of the year so that they don’t have to contact us when they have to work from home again. “