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If you are working at residence, you may declare for the additional electrical energy you employ

If you’ve got been working from residence over the previous few months, chances are you’ll nicely save on journey prices and lunches, however you may run up different payments, together with heating and electrical energy.

Some employers give their employees an allowance to cowl these extra prices.

But if they do not, staff can nonetheless declare a small discount of their taxes for the time they have been pressured to work from home.

How a lot can I declare?

It could be very difficult to calculate precisely how a lot of your electrical energy bill is used for work – so HM Revenue and Customs (HMRC) permits you to declare up to £6 per week of bills with out having to present payments or paperwork to justify it.

That does not imply you save £6 per week – you solely save the tax you’d have paid on it. That works out as £1.20 per week (or round £62 a yr) for a primary charge taxpayer, or £2.40 per week (£104 a yr) for the next charge taxpayer.

And you should be working at residence as a result of you could have to, not out of selection.

It is feasible to declare greater than £6 per week, however you could have to present paperwork to assist your declare.

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Luckily you do not have to calculate precisely how a lot you could have spent working at residence

If your employer gives a working from residence allowance, that is tax unencumber to £6 per week – so you may’t make one other declare for tax reduction on high.

These allowances have been obtainable for years, however consciousness has grown because the pandemic pressured many places of work to shut.

“We have had quite a few calls about this,” says Yvonne Graham, tax supervisor at Ensors accountants in Ipswich. “It’s not going to make people rich, but it is a useful amount.”

Before 6 April 2020, you have been allowed to declare solely £4 per week with out offering proof. It’s nonetheless doable to declare again so far as April 2016, however for prior years you may solely declare the decrease charge.

Case examine: The long-term residence employee

Emma Peck, who works in monetary companies in Buckingham, has been claiming the complete allowance since she began working from residence in 2017.

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Emma Peck

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Emma Peck has been claiming bills for working at residence since 2017

She has no workplace to go to, so she is obliged to work from residence and due to this fact entitled to declare.

Previously, she was self-employed, and was used to claiming for bills to scale back her tax bill, as many self-employed folks do.

So yearly when she will get her “notice of coding” from HMRC, which says how a lot she will be able to earn earlier than paying tax, it contains an allowance for “Job Expenses” – the price of working at residence.

This yr, it is £312 – in different phrases, 52 x £6 per week.

Emma has inspired a lot of her home-working colleagues to declare too. “The thing with people who are PAYE, they are used to having everything done for them. They are scared to go onto the HMRC website.”

How do you make a declare?

There are two methods to declare bills – both on your annual tax return, when you file one, or on a particular type known as a P87, which is out there electronically through Government Gateway, or on paper.

If you are working at residence indefinitely, you may get your tax code modified like Emma to get the financial savings recurrently.

If you are solely working from residence for a brief time period, it is smart to wait till you are again at work, so you know the way a lot to declare for.

HMRC stated in a press release: “Employees can claim the P87 expenses at any time but claiming when they return to their place of work means their claim will be for the right amount and they will only have to contact us once.”

Can you declare for different issues?

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Home employees can declare the additional price of heating

If you’ve got had to purchase, say, a pc or an workplace chair to have the opportunity to work from residence, your employer would possibly pay you again.

If not, you may declare tax reduction on what you could have purchased, so long as it’s used “wholly, exclusively and necessarily” for work.

You will want to preserve data, and declare the precise quantity.

You may also declare for work phone calls on high of the £6 flat charge – once more, you have to to preserve data and declare the precise quantity.

But you may’t declare for home-related prices that do not improve since you’re now working there. That contains council tax funds, hire, mortgage curiosity, or water – except you could have a water meter.

Case examine: The new claimer

Jonathan Griffin from South Yorkshire works in IT. He has been working from residence since 23 March.

He filed a declare utilizing a P87 type for the tax on seven weeks’ price of bills from 6 April.

That would come to £6 x 7 = £42. As a primary charge tax payer he’ll get 20% of that – about £8.40 – again.

He filed the declare on-line with HMRC on 23 May, which he discovered “quite straightforward”. There is a tracker on the HMRC web site, which initially stated it could be processed on 15 June.

But on the time of writing the fee nonetheless hadn’t arrived and the tracker says it’s nonetheless being processed.

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