Many of us have closed workplaces (again), and our teams are working from home. HMRC has confirmed that claims from employees working at home due to coronavirus measures if their workplace is closed, count. Any claims can be backdated as well to when the team started working from home. Your team may want to take advantage of this through the new microservice HMRC has introduced to simplify the process.
Apportioning extra costs, such as heating and electricity, is tough. Instead, your team can claim a flat rate of £6 a week. There are two ways to do this:
Any employee can set themselves up to claim the £6 a week tax relief. They will need to click this link and answer a couple of eligibility questions. They will then be directed to their HMRC account where they can claim the tax relief. To make the process easy, HMRC says that the £6 a week claims will not need to justify that figure – meaning your team won’t need to keep receipts or prove information. Tax relief of £6 a week equates to a gain of £1.20 a week for a basic 20% rate taxpayer and £2.40 a week for a higher 40% rate taxpayer. Tax relief is repaid through their tax code, so they’ll pay slightly less tax each month.
As an employer, you can pay the flat £6 a week. You can pay this through payroll or expense claims. You also get to claim corporation tax relief on these payments, so the £6 a week will only cost you £4.94 a week. If you believe your team has higher increased costs than £6 a week, you can claim more, but you will need to make special arrangements.
HMRC has also recognised that this year is very different. To save people putting in multiple claims, if your team is eligible, they will get the full year’s worth of tax relief. This includes even if people have only worked from home for some of the year, to avoid needing to contact HMRC if they have to work from home again.
If your team believes they have higher increased costs than £6 a week, they can claim more. But, they will need evidence of the cost increases and be able to apportion these specifically to the fact they are working from home. This becomes a much more laborious process.
Your team will have to calculate their additional working from home costs and claims relief on this amount. According to HMRC, additional costs include things like heating, metered water bills, home contents insurance, business calls or a new broadband connection. They don’t include costs that stay the same whether you’re working at home or in the office – such as mortgage interest, rent or council tax. They’ll need to keep evidence for the costs, such as bills or receipts. Once they have the calculation, they can follow the same link and process to claim the relief through their HMRC account.
To make any claims themselves, your team will need to have their Government Gateway ID. If they don’t currently have one, they can create one as part of the process. They may also be able to claim tax relief on equipment they’ve bought personally, such as a laptop, chair, or mobile phone.
If you need any help with any of this, please let us know.
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