People working from home during Covid-19 coronavirus lockdown may be able to claim money back from the government, says money expert Martin Lewis
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People working from home are entitled to claim money back from the government – even if they are on a full-time salary.
Money Saving Expert Martin Lewis has said that anyone working from home, and who may have additional costs on household utilities can claim an allowance, so they aren’t left out of pocket.
In his blog, Mr Lewis said: "If your employer requires you to work at home, you can – and have always been able to – claim for increased costs due to working from home, eg, heating and electricity.
"Clearly, right now many firms have closed workplaces and that means across the UK millions of staff are temporarily required to work from home, and therefore are eligible to claim for increased costs. HMRC says it will consider claims from employees working at home due to coronavirus measures if their usual workplace is closed.
"Yet apportioning these costs is tough. So instead, from today, April 6 (the new tax year) you can, in simple terms, claim a rate of £6 per week. You can claim more if your costs are higher, but it becomes a much more labour intensive process."
There are two ways to do this:
- 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).
- Claim tax relief on £6 per week. 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.
Mr Lewis continued: "To make the process easy, HMRC says that claims in line with the employers' payment will not need to justify that figure – meaning you won't need to keep receipts or prove information.
"The impact of a £6 per week claim is the tax savings, that's a gain of £1.20 per week for basic 20 per cent rate taxpayers, and £2.40 per week for higher 40 per cent rate taxpayers."
If you believe you have higher increased costs then you can claim more, but you will need evidence of the cost increases.
How to claim the tax relief
If you normally do a self-assessment form, you can claim on it. Yet for most people, this 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.
You'll be asked for your employer's name and PAYE reference (which you can find on your payslip or P60), and your job title.
For postal P87s, you'll also need your national insurance number.
The key section for filling in is titled Using Your Home as an Office.
Assuming you're not eligible for tax relief on other work-related expenses, like uniform tax rebates, leave them blank.
HMRC told Mr Lewis that provided you've had increased costs, just put a total amount that's equivalent to £6 per week for the period you've been working from home and that's fine, you won't need to show receipts.
If your employer hasn't paid you a working from home allowance or reimbursed your homeworking expenses, just put £0.
If you're claiming through the postal form, you'll need to add a "Using your home as an office" expense manually in the "Other Expenses" section.
Mr Lewis said: "You claim retrospectively on expenses had. So, if you're only at home due to coronavirus, it's best to wait until you're back at work, or a few months anyway, then make the whole claim at once. Your tax code will likely be adjusted so you pay less tax over the year, as opposed to you getting a direct refund."
