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Have you claimed your working from home allowance?

Employees urged to use calculator to check entitlement to working from home tax relief allowance

14 May 2021, at 3:00pm

Employees who are currently required to work from home as a result of the ongoing COVID-19 pandemic are advised to check their eligibility for tax relief. Tax preparation specialist David Redfern, director of DSR Tax Refunds Ltd, issued his advice for homeworkers as HMRC updates its tax relief rates for homeworkers for tax year 2021/22.

Prior to the COVID-19 pandemic, HMRC's rules surrounding who was eligible to claim tax relief as a result of working from home were considerably tighter, explained Redfern, who stated “With the onset of the pandemic and widespread homeworking encouraged by the UK government, HMRC loosened its regulations around who could claim tax relief to cover the additional costs resulting from homeworking. Prior to last March, those who worked from home by choice rather than required to by their employer were not eligible for tax relief. Obviously, this past year has seen a widescale change in working patterns and it is refreshing to see HMRC loosen its rules to allow more employees to get help to cover their increased home expenses”. For the current 2021/22 tax year, employees who work from home can claim a £312 allowance to cover additional costs such as heating, electricity and metered water as a result of more time spent at home.

To help workers to calculate how much they are entitled to claim in tax relief, DSR Tax Refunds Ltd has introduced a handy tax refund calculator on their website, with which employees can check the full range of tax relief they are entitled to. Redfern stated “We know that many people find the whole subject of tax and tax relief very confusing and as a company we are proud to unveil our new calculator to help people see how much they might claim for working from home, as well as any other expenses they may have incurred as a result of doing their job. Employees might not be aware but they can claim the full £312 allowance, even if they have only worked at home for a single day during the tax year - whether because they have been required to self-isolate or they have taken part in an online meeting via Zoom or Google Meet, they don't have to have been working from home day in day out, and they won't need to provide expenses for this allowance”. In addition, employees can claim tax relief on any expenses they have incurred while furnishing a home office, such as furniture or laptops although receipts will be needed for these purchases.

Redfern reassured employees who have been working from home since the start of the pandemic, stating “Employees who may be worried that they have been working from home since last March can take reassurance in the fact that tax refund claims can be backdated for four tax years so, if you have been working from home since the start of the pandemic, it isn't too late to claim your allowance for the previous tax years covered. This also includes any essential purchases you may have made at the start of the pandemic in order to kit out a workable home office, however you will only be able to claim for expenses which have not been reimbursed by your employer - tax relief is designed to ensure that you are not left out of pocket”. Where an employer has already reimbursed any working from home expenses or has indicated that they intend to, tax relief is not permitted for those expenses. Self-employed workers are not entitled to claim this particular tax allowance but their working from home expenses can be claimed at a different rate via their self-assessment tax return.

For more information about working from home expenses, or to use the tax relief calculator, employees are advised to head to the DSR Tax Refunds Ltd website, which has a wide range of resources relating to tax and expenses.

About DSR Tax Refunds Ltd

DSR Tax Refunds Ltd (company registration 12541357) is a firm of tax preparation experts who specialise in CIS tax returns for construction workers working within the Construction Industry Scheme (CIS) as well as employees who are eligible to claim a tax refund for their work-related expenses, including employees working from home as a result of the COVID-19 pandemic. Their friendly and helpful team can help with all relevant paperwork to ensure clients claims are handled in an accurate and efficient manner.