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How to claim tax relief on coronavirus working from home expenses

How to claim tax relief on coronavirus working from home expenses
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Please note that tax treatment depends on the specific circumstances of the individual and may be subject to change in the future.

Coronavirus has pushed everyone to make adjustments to the life they had before the outbreak. Working from home is now the new normal for most individuals who worked in the office before COVID-19. Have you noticed that working from home expenses may have led to an increase in your household expenditure? If your answer is yes, you can claim tax relief on these additional expenses.

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What are coronavirus working from home expenses?

Look back at what you spent each month in your household before the coronavirus outbreak and note the amount down. Now, look at how much you spend each month having started working from home and note down the amount. What is the difference? The difference is what is being referred to as coronavirus working from home expenses.

For clarity purposes, your additional expenses might be due to an increase in your water, heating, phone and internet bills working from home. It may also be from purchasing something or paying for a subscription you require for work purposes. This does not include expenses that would remain constant, whether working in an office or from home.

How do you make your calculations?

From the tax year that started on 6th April 2020, you can claim tax relief at a rate of £6 per week. For previous tax years, you can claim tax relief at a rate of £4 per week. Keep in mind that you might only be able to claim tax relief within four years of the end of the tax year that you spent your money. This means that within the current tax year of 2020/2021, you might only be able to claim tax relief for the money you spent from the tax year 2016/2017.

You have two options:

1)  Claim tax relief to the amount of £6 per week on coronavirus working from home expenses. In this case, you do not need to provide receipts.

If you fall under the basic tax rate band of 20%, you can claim tax relief on the amount of £6 per week from the tax year 2020/2021. This means that you could get 20% of £6 = £1.20 each week in tax relief. The amount of tax relief you can claim may, of course, change based on your tax rate band, and that is why you might come across statements like you can claim tax relief to the tune of £6 per week, up to £124.

In the basic tax rate band, you pay tax at a rate of 20%, which comes to £1.20 in tax relief a week. This amounts to approximately £62 in a year.

If you are in the higher tax rate band, you pay tax at a rate of 40%, which comes to £2.40 in tax relief a week. This amounts to approximately £124 in a year.

For the tax years 2016/2017, 2017/2018, 2018/2019 and 2019/2020, you can claim tax relief on £4 per week. This means that you could get 20% of £4 = £0.80 each week in tax relief.

2)  Claim tax relief on the exact amount you spend per week on coronavirus working from home expenses. You may need to keep all your receipts and bills as evidence.

If you fall under the basic tax rate band of 20%, you can claim tax relief on the coronavirus working from home expenses you incur per week. Of course, you might have different values each week. If your additional working from home expenses amount to £100 in a particular week, you could get 20% of £100 = £20 that week in tax relief, considering the factors mentioned above.

Claiming tax relief on coronavirus working from home expenses

How you claim tax relief depends on various factors. For example:

  • If your employer has not or has paid some of your expenses;
  • The number of jobs you have;
  • If you usually complete a self-assessment returns form.

There are three ways to claim tax relief: online, by post and by phone.

  • Claim your tax relief online if your employer has not paid back any of your working from home expenses. The same applies where your employer has paid some of the expenses. Your tax relief claim needs to be calculated on the amount that has not been refunded. You might need a Government Gateway user ID and password.
  • If you have multiple jobs, you might need to claim your tax relief by post. You are expected to fill out this form, print it and send it to HMRC.
  • If you usually complete a self-assessment returns form, you can claim your coronavirus working from home expenses as part of the form.
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