During the pandemic and lockdown, with the coronavirus restrictions, many of us found we were working from home. While this may have meant saving on transport and fuel to get to and from work, costs did add up elsewhere. For example, many households found that their utility bills were rising as a home that was previously empty during the day now needed heating and computers/laptops were running throughout the working day.
If you have been working from home during the pandemic, you may be entitled to a small amount of relief for these additional household costs. This is known as the working from home relief.
HMRC have stated that additional costs such as heating, metered water bills, house insurance, business calls or a new broadband connection could be included in the working from home relief. However, other household costs which remained the same, such as: mortgage interest, council tax or rent, could not be covered by the working from home relief.
How Does The Working From Home Relief Work?
If you have regularly worked from home during the pandemic, then you can claim for each applicable week. There are two ways in which you can do this. It is possible to claim £6 per week, from 6th April 2020. This can be done without any evidence of these extra costs.
However, if you know that the additional weekly costs are over £6 a week, it is possible to claim for the exact amount of extra costs. To do this, you will need evidence for these figures. This could include bills or receipts.
What Does The Working From Home Relief Mean For You?
The working from home relief will reduce the amount of tax that you have to pay. It’s important to note that the amount of relief you receive will be the based on your tax banding.
For example, if you are on the Basic Tax Rate of 20% you will get a weekly relief of £1.20 for every £6 claimed. For those of the Higher Tax Rate of 40% you will get a £2.40 weekly relief on the £6 claimed per week. Those on the Additional Tax Rate of 45% will get a £2.70 weekly relief on the £6 claimed, for each week it is claimed. Of course, if you need to claim more than £6 a week, the weekly relief will change accordingly.
If you want to know more about the working from home relief and how you can claim for it. Call our team of friendly Peterborough accountants now.