How to help offset cost of working from home
How to help offset the cost of working from Home
It was reported recently by Energy Helpline, that each Household working from home full time can expect to pay around £107 over the winter seasons, an increase of nearly 18% over a “normal” year.
Note - Energy companies have NOT offered industry wide payment holidays, some might allow customers in debt, a way forward.
How to offset these costs and others - Claim a Tax Relief (if you are not receiving a payment from your employer)
As at 13th October 2020, HM Revenue and Customs (HMRC) reported that they had received more than 54,800 claims from customers using a new online portal which allows workers to claim tax relief for working at home.
This includes if you have to work from home because of coronavirus (COVID-19).
NOTE - This applies to each eligible person in a household, NOT per household.
Launched on 1 October 2020, the online portal
https://www.gov.uk/guidance/claim-income-tax-relief-for-your-employment-expenses-p87
It is considered to be simple to use and has been set up to process tax relief on additional expenses for employed workers, who have been told to work from home by their employer to help stop the spread of coronavirus (COVID-19).
However, please note, if you have NOT previously registered for a Government Gateway “Log In”, you will need to complete the following process -
https://www.access.service.gov.uk/login/signin/creds
NOTE :- You cannot claim tax relief, if you choose to work from home.
Additional costs include things like heating, metered water bills, home contents insurance, business calls or a new broadband connection. NOTE - No proof is required for the standard Tax Relief of £312.
Please note, if you are looking to claim in excess of £312, the eligible costs do not include costs that would stay the same, whether you were working at home or in an office, i.e. your fixed costs such as your mortgage interest, rent or council tax etc.
NOTE - In addition you may also be able to claim tax relief on equipment you’ve bought, such as a laptop, chair or mobile phone, (Receipts / proof will be required.)
Each home worker, who is an employee, can take advantage of this Tax Relief, even only worked just one day, in this current tax year 6th April 2020 to 5th April 2021.
Because of Covid 19, temporary Tax breaks have been agreed where an Employer is allowed to pay up to £6 per week - Tax Free to any employee working from home. However the Inland Revenue has recognised that this could be a major problem to Employers, due to potential cash flow problems, so it has been agreed that any employee can instead apply directly to the Inland Revenue and claim the full £312 themselves. https://www.gov.uk/government/news/54800-customers-claim-tax-relief-for-working-from-home
“From 6 April 2020, employers have been able to pay employees up to £6 a week tax-free to cover additional costs if they have had to work from home.
Employees who have not received the working from home expenses payment directly from their employer, can instead apply to receive the tax relief from HMRC.”
HMRC is encouraging customers claiming tax relief for working from home to apply directly through GOV.UK.
“Eligible taxpayers can claim tax relief based on the rate at which they pay tax. For example, if an employed worker pays the 20% basic rate of tax and claims tax relief on £6 a week, they would receive £1.20 a week in tax relief (20% of £6 a week) towards the cost of their household bills.
Higher rate taxpayers would therefore receive £2.40 a week (40% of £6 a week). Over the course of the year, this could mean taxpayers can reduce the tax they pay by £62.40 or £124.80 respectively.”