As of April, nearly 800,000 employees who worked from home during the pandemic have already claimed tax breaks for household-related costs, HM Revenue and Customs (HMRC) announced.
The saving is up to £ 125 per year for each worker and eligible workers can have full year entitlement if instructed by their employer to work from home, even if it was for one day during the tax year .
Employees who have either been working in an office since the beginning of April or are preparing to return can still take advantage of the home work discount and benefit from the full annual discount 2021/22.
The application is quick and easy via the HMRC online portal. Employees can apply directly themselves and receive the tax relief in full. As soon as your application has been approved, your tax number will automatically be adjusted for the tax year 2021/22 and will receive the tax relief directly from your salary. Agents cannot use the online portal to apply on behalf of a customer.
Myrtle Lloyd, HMRC’s General Manager, Customer Service, said:
“More people are back to work now, but it’s not too late to apply for household tax breaks if they worked from home during the pandemic.
“You can quickly and easily check that you are eligible and apply online – go to GOV.UK and search for ‘tax breaks from home’.”
As of April last year, the maximum amount that employers can pay tax-free without employees having to show an increased bill is £ 6 per week. Employees who have not received home labor cost payment directly from their employer can apply for tax relief from HMRC.
Eligible customers can claim tax breaks based on the rate at which they pay tax. For example, if an employee pays the 20% property tax rate and claims a tax break of £ 6 per week, he receives £ 1.20 per week in tax relief (20% of £ 6 per week) on the cost of his household bills. Taxpayers with a higher tax rate would receive £ 2.40 per week (40% of £ 6 per week). Over the course of the year, this means customers can cut the taxes they pay by £ 62.40 and £ 124.80 respectively.
If employees had to work from home in the 2020/21 tax year but didn’t take advantage of the tax break, they didn’t miss it; HMRC accepts retrospective claims for up to four years. You will receive a lump sum payment for all successful retrospective claims.
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