HMRC has changed working from home tax relief rules – are you still eligible?

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The working from home tax relief was introduced to help Britons cover the business expenses they wouldn’t usually have had during the pandemic. However, the new tax year has ushered in new rules, meaning that some people will no longer be eligible for the relief.

Over the last two years, if someone worked from home for at least one day of the tax year they could claim some of their tax back for the whole year. 

At the time, this was worth roughly £62.40 as BBC Money Box reporter Dan Whitworth explained.

However, these rules have changed in the new tax year which began on April 6. 

The move to remote working at the start of the pandemic had an array of effects on household budgets. 

Firstly, many found themselves saving money by not having to commute to the office everyday.

It also meant that some faced higher energy bills and other expenses coming out of pocket that their employer would usually pay for. 

Many people were left in a strange position, and those that had to work from home can still claim their tax relief for those two years. 

However, HMRC issued a warning about the rule changes, which can see people being prosecuted if they do not obey them.

Undoubtedly the pandemic has changed the world of work, while some were forced into working from home, others are choosing to stay that way now that restrictions have eased. 

Because of this, from the start of the 2022 tax year people who choose to work from home will no longer be eligible for the relief. 

This means that if one’s employer does not have the facilities available for them to work in an office or similar premises, meaning they have no other option but to work from home, only then will they be eligible. 

New guidance on the Government website states: “You can claim if your employer has not already paid your expenses and you have additional household costs as a result of working from home.

“To claim tax relief, you cannot have just chosen to work from home.

“You must ensure you meet the rules for claiming, as you may be prosecuted if you deliberately give incorrect or misleading information.”

Government guidance indicates that if employees who meet the homeworking criteria use their own money to buy necessities for their work, and only use these items for work, may be able to claim tax relief.

However, if one’s employer provides them with recompensation or offers an alternative the employee will not be eligible. 

Additionally, employees must have paid tax in the year they want to receive the relief for. 

The amount of relief they receive will be based on what they have spent and the rate of tax they pay. 

For example, if a person spends £60 on work necessities and pays 20 percent tax in that tax year they can claim a relief of £12. 

Certain claims may require people to keep records of their expenditure and they will need to claim within four years of the end of the tax year wherein they spent the money. 

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