The new tax year started on 6th April 2021, and despite the fact that working from home (WFH) has become the new normal for many employees, the date acts as a bit of a reset. This means that you will need to take action to ensure you get the work from home tax relief you are entitled to.
In short, the rules for the tax year 2021/22 haven’t changed and you can continue to claim tax relief on certain costs that have not been reimbursed by your employer. However, you need to be mindful as HMRC has confirmed that a new claim will need to be made for the coming tax year. Our article explains how it works.
Understanding the WFH tax-free allowance
You should be able to claim tax relief for additional household costs incurred as a result of working from home on a regular basis, and that means you will be eligible whether you work full or part-time at home.
The fundamental point to understand about claiming WFH-tax relief is, that you are only entitled to claim if you have to work from home as a result of the current Covid-19 restrictions and not because you are choosing to work from home.
Once you have established the rules of engagement and confirm your entitlement, it is then a case of working out how much you can claim and renewing your claim at the start of the new tax year.
Some rules have been relaxed
Pre-pandemic, when you’ve worked from home as an employee, you’ve already been entitled to a tax-free allowance for heating, lighting and various other costs. This meant that if your employer was not reimbursing the actual expense costs, when you provide them with a valid receipt, they could just simply pay you an additional £4/week tax-free.
However, as a result of the relaxation of the rules that went through parliament in March 2020 due to the Covid-19 pandemic, employees can now make the claim themselves via their self-assessment return, or from the government gateway website through their PAYE code. This means that employees, whose employer is not willing or able to give them the increased £6 per week allowance, can still claim the money by having the amount deducted from their taxable income.
A new starting point
As Martin Lewis from moneysaving.com explains, you might be entitled to two years WFH tax relief even if you only had to work from home for one day during the pandemic. The important point to note is that you will need to make a new claim in 2021 if you want to be compensated for extra costs via tax relief, because it will not be rolled forward automatically.
HMRC guidance has previously confirmed that you can claim the full £26 per month (£6/week) tax relief even if you split your working hours between home and the office, so you don’t have to worry about making a pro-rata claim. However, it is likely that the rules will change again once the pandemic is over and working routines have returned to a position of normality.
Expensein effortlessly integrates with most accounting packages so you should be able to keep on top of your expense management with ease, and that means being able to claim everything you are entitled to. Get in touch with our team today.