HMRC launch microservice to aid employees working from home as a result of COVID-19 reclaim expenses
HMRC has simplified the process for applying for working-from-home tax relief due to an influx of applications, with more people working from home as a result of the COVID-19 pandemic. They have now introduced a new microservice that can be accessed through the government gateway portal.
This new service means you can now claim a whole tax year, even if you have only worked from home for one day in the entire year. This policy is only going to be in place for the 2020/21 tax year due to the unique situation we find ourselves in.
Am I eligible?
To be eligible for application through the microservice you must:
· Have worked from home on either a full or part-time basis.
· Be an employee.
· Not be reimbursed for working at home by your employer.
How to claim?
HMRC is allowing employees to make a claim from 23rd March 2020 for this tax year. Therefore, you can make a claim for this whole tax year and an additional two weeks. Employees that are working from home can claim £6 per week (or the exact amount you’ve incurred evidenced by receipts, bills, or contracts) to be relieved against tax payments.
You can claim more for substantial equipment purchased but any such claim must be evidenced, the equipment must be for work with no significant private use.
To access the site, follow the link below, you’ll need a government gateway ID. This can be set up if you don’t already have one.
How does claiming on your taxable income work?
If you want to claim the basic rate of £6 per week and you pay basic rate income tax (20%) you would receive £1.20 a week in tax relief (20% of £6), equating to £64.80 in your pocket for the claim period.
If you pay the higher income tax rate (40%) you would receive £2.40 a week in tax relief (40% of £6) equating to £129.60 in your pocket for the claim period.
This will be adjusted through your tax code, directly increasing your net pay for the remaining months of the year.
Working from home part-time?
HMRC has stated that employees that are required to work from home part-time can still claim the full £6 allowance.
These rules haven’t changed, if you work from home you can claim a reasonable proportion of your household expenses.
How can we help?
At Hawsons we have a dedicated team of personal tax accountants at our offices in Sheffield, Doncaster, and Northampton. Our tax team works together to provide proactive, well-rounded, technically robust tax advice to private clients including individuals to help ensure that their tax affairs are in order and are correctly dealt with.
Audit Manager, Doncaster
Dan trained and qualified as a Chartered Accountant with Hawsons at the Sheffield Office, joining in 2012 before moving to the Doncaster Office in 2018. During his time at Hawsons, he has gained a range of experience providing audit, accountancy, and taxation services, including Solicitors Regulation Authority audits. Working with corporate entities, sole traders, and partnerships, he is able to advise clients on a wide range of business matters.
Free initial consultation
Audit Manager, Doncaster
01302 367 262