Claim £6pw for working from home expenses
Working from home due to coronavirus? Claim £6pw tax back on extra home expenses.
Millions of staff are still working from home due to the COVID-19 pandemic, with no end in sight as yet for office workers and other occupations. If you’re familiar with working from home, you’ll know that there is a variety of claims that you can make, many of which are outlined in our A-Z of business expenses you can claim below:
HMRC has said that it will consider home working claims during the coronavirus, but proportioning these costs can be timely and complicated. So, many are advising workers to claim a simple £6 a week to support extra costs, like electricity and gas bills, that accumulate while spending more time at home.
Options to access home expenses
- Employers can pay you £6/week extra tax-free. Employers can give you an allowance up to this amount and what they give you is free from tax, so you get it all (to give you more, it will need to make special arrangements).
With many firms struggling, this may not be the best option.
- Claim tax relief on £6/wk (worth £1.20/wk at 20% tax, £2.40/wk at higher rate). If your employer won’t pay expenses for your extra costs due to necessary working from home, but you have them, then you can ask for the amount to be deducted from your taxable income.
HMRC says that claims in line with the employers’ payment will not need to justify that figure, so you won’t need to keep receipts or prove information.
The impact of a £6/wk claim is the tax savings:
- £1.20/wk (about £62/year) for basic 20% rate taxpayers
- £2.40/wk (about £124/yr) for higher 40% rate taxpayers.
If you believe you have higher increased costs then you can claim more, but you will need proof.
How to apply for home expenses
If you normally do a self-assessment form, you can claim there. Others will simply require filling in a P87 form. This can be done through an online P87 form through your Government Gateway account or by filling out a postal P87 form.
In the online form, there are two boxes:
- ‘Amount paid by you’. Provided you’ve had increased costs, just put a total amount that’s equivalent to £6/wk for the period you’ve been working from home. You don’t need to show receipts.
- ‘Amount paid to you by your employer’. If your employer hasn’t paid you a working from home allowance or reimbursed your homeworking expenses, just put £0.
Submitting your claim for home expenses
You’ll need to add a ‘Using your home as an office’ expense manually in the ‘Other expenses’ section if you’re applying by post.
You claim retrospectively on expenses. If you’re only at home due to coronavirus, wait until you’re back at work then make the whole claim at once. Your tax code will likely be adjusted so you pay less tax over the year.
If you submit your application online you may hear back within a couple of weeks. However, if HMRC is under pressure it may take longer.
Private clients services at Cardens Accountants
Cardens pride ourselves on taking a proactive approach to tax affairs. We will look for ways to improve your tax position, rather than just report on it. Click our private client services page to review whether our work is relevant for you.