How to claim up to £125 tax relief if you have been working from home due to Covid

Have you checked if you're eligible for the payment? (Photo: Shutterstock)Have you checked if you're eligible for the payment? (Photo: Shutterstock)
Have you checked if you're eligible for the payment? (Photo: Shutterstock)

Millions of people can still claim tax relief if they have been forced to work from home due to the Covid-19 pandemic.

Home workers could make a saving of up to £125 per year for work related costs, which can be claimed even if you are not working from home full time.

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The tax relief has already been claimed by almost 800,000 people so far this tax year, according to HM Revenue and Customs (HMRC), but millions of eligible workers could still be missing out.

Here’s what you need to know about the payment and how to claim it.

Who is eligible to claim?

People who have been told to work from home by their employer due to the Covid-19 pandemic may be eligible to claim the tax relief for household-related costs.

This can include gas and electricity, metered water and business phone calls, as well as dial-up internet access.

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It may also be possible to claim tax relief on any equipment you have purchased for your work, such as a laptop, chair, or mobile phone, and you only use these items for your work.

You will not be able to claim for the whole bill, just the part that relates to your work.

You cannot claim the tax relief if your employer gives you the money you have spent on work-related costs back, or if you pay tax by self-assessment as this will be claimed via your next tax return.

Those who choose to work from home will not be eligible for the payment.

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Myrtle Lloyd, HMRC’s director general for customer services, said: “More people are getting back to office working now, but it’s not too late to apply for tax relief on household expenses if they’ve been working from home during the pandemic.

“It’s quick and easy to check if you’re eligible and apply online – go to GOV.UK and search ‘working from home tax relief’.”

How much can I claim?

Those forced to work from home can claim tax relief on either of the following:

  • £6 per week from 6 April 2020 (for previous tax years the rate is £4 a week). You will not need to keep evidence of your extra costs.
  • The exact amount of extra costs you have incurred above the weekly amount. You will need to provide evidence of these costs, such as receipts, bills or contracts.

You must have paid tax in the year to be able to claim and you will be awarded tax relief based on what you have spent, and the rate at which you pay tax.

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This means if you pay the 20 per cent basic rate of tax, and claim tax relief on £6 per week, you would receive £1.20 per week in tax relief.

Those who pay the higher 40 per cent rate of tax would be able to claim £2.40 per week.

Over the course of the year, this means customers can reduce the tax they pay by £62.40 or £124.80 respectively.

If employees were required to work from home during the 2020 to 2021 tax year but did not claim for the tax relief, they have not missed out; HMRC will accept backdated claims for up to four years. Workers will receive a lump sum payment for any successful backdated claims.

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How to submit a claim

If you have been asked by your employer to work at home due to the pandemic, you can still apply for tax relief on any work-related costs.

Home workers can check if they are eligible via the government website.