Working from home tax rebate: How to claim up to £125 tax back due to Covid

WORKERS could claim up to £125 in tax back if they have to work from home for just one day because of the pandemic.

Under the scheme, your tax code is adjusted so you're not paying as much tax.

The scheme is designed to help employees claim back any additional expenses they may have, like energy bills or dial-up internet access for business calls.

HMRC accepts claims for the whole tax year, and it launched an online tool last October to help you do it.

What can I claim tax relief on?

THERE are certain things that you can claim tax on under HMRC rules. They include the following:

  • Expenses for working from home
  • Repairing or replacing small tools needed to do their job (for example, scissors or an electric drill)
  • Cleaning, repairing or replacing specialist clothing (for example, a branded uniform or safety boots)
  • Business mileage (not commuting)
  • Travel and overnight expenses
  • Professional fees and subscriptions

You can also still claim if you worked from home during 2020 meaning you can gain up to £250 in total for both this tax year and last.

Martin Lewis has urged people working from home, even if for one day only, to claim the tax back.

The crucial point is, however, that your employer must have required or asked you to work from home to claim.

This doesn't apply if it's something you've decided on your own whim.

More than 1.45million people have claimed the tax relief using the online tool.

The online service is easy to use and just takes a few minutes to make a claim.

We explain what you can claim below and how to go about it.

How much can I claim?

This is a little bit complicated, but essentially your employer can effectively pay you £6 a week extra tax-free to cover expenses.

But with many firms struggling right now, it's more likely you'll instead claim tax relief on the £6 a week.

If you claim the tax relief, the exact reduction to your tax bill depends on your tax rate and it's the highest rate of tax you pay that's used.

For those paying the standard tax rate of 20%, you would get £1.20 a week in tax relief.

While for people who pay tax at the higher rate of 40%, you'd get £2.40 a week.

Additional rate tax payers who pay 45% will get £2.70 a week.

So claim for the entire tax year, that's tax relief of £62.40 for basic rate taxpayers, £124.80 for higher rate tax payers, and £140.40 for additional rate tax payers.

How do I claim the cash?

HMRC has an online tool to help you submit a claim for this tax year.

Once the application has been approved, the online portal will adjust your tax code for the 2021 to 2022 tax year.

You will then receive the tax relief directly through your salary and will continue to receive the adjustment until April 5, 2022.

What you’ll need to make a working from home tax claim

YOU’LL need the following basic information to hand before you make tax claim via HMRC:

  • Something to prove your identity – this could be a passport, driving licence, or you can answer various questions based on your credit file
  • A P60 or recent payslip
  • National insurance number
  • Your Government Gateway user ID and password or you can create a user ID if you do not already have one.

This means you won't get a one off payment, instead it will be included as part of your weekly or monthly payments from your employer.

You'll be able to see the money on your payslips.

Workers can also use the tool to claim going back the past four tax years.

In this case you'll receive a lump sum payment instead of a monthly salary boost.

If you’re looking for ways to give your salary a bit of a boost, there are lots of easy and simple ways you can make £100s extra a month and we have 12 ways you could get a head start.

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