HMRC issues update on tax refund of up to £125 as 800,000 take action to claim

Martin Lewis on working from home tax allowance extension

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HMRC helps people to deal with their tax affairs each year, and there may be instances where individuals can receive money back. One such case has arisen for many people out of COVID-19, where tax relief can be gained from working from home. Due to restrictions, many individuals were required to work from home by their organisations, but this may have resulted in additional household costs.

The working from home tax relief programme could help Britons to get money back, and eligible workers could get the full year’s entitlement, even if they only worked from home for one day during a tax year.

Even those who have returned to the office now restrictions are beginning to lift may still be able to benefit. 

Myrtle Lloyd, Director General for Customer Services at HMRC, commented on the matter.

She said: “More people are getting back to office working now, but it’s not too late to apply for tax relief on household expenses if they’ve been working from home during the pandemic.

“It’s quick and easy to check if you’re eligible, and apply online.

“Go to GOV.UK and search ‘working from home tax relief’.”

Britons will be able to apply for the tax refund directly themselves in order to receive the full amount which is due.

If an application is approved, a person can expect their tax code to be automatically adjusted for the 2021/22 tax year.

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They will then receive the tax relief directly through their salary.

Some people will have received a working from home expenses payment directly from their employer.

This means these individuals will not have any need to claim themselves for working from home tax relief as it has already been applied.

But for those who haven’t received this from their employer, reaching out to HMRC is the best course of action.

The tax-free amount per week, without being required to provide evidence of increased household bills, is £6 per week.

People will be able to claim tax relief based on the rate at which they are required to pay tax.

Basic rate taxpayers are taxed at 20 percent, and therefore if they were to claim tax relief on £6 per week, they would get £1.20 per week in tax relief.

Higher rate taxpayers, though, are taxed at 40 percent, and based on the same amounts, they could get £2.40 per week.

Across the year, then, customers will be able to reduce their tax bill by £62.40 or £124.80 respectively.

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But for those who have not claimed for the previous tax year, even if they did work at home, there is no need to panic.

This is because HMRC accepts a backdated claim for up to four years of this kind of support.

Those taking this course of action can expect to receive their back payments in the form of a lump sum.

Britons will be able to use the Government’s online tool to be able to check if they can claim this kind of tax relief.

It will ask questions such as ‘Are you only claiming tax relief on your expenses for working from home?’ and ‘Do you complete Self Assessment returns?’ to ascertain information about the person looking to claim.

If suitable to claim tax relief for work-related expenses, then a person will need a Government Gateway user ID and password, which can be created if they do not already have one.

This will usually work best if someone has specific information to hand, including:

  • A National Insurance number
  • A recent payslip or P60; or a valid UK passport

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