That bittersweet time of year is upon us: the financial new year. Now is the time to go back through your expenditures, file your taxes and if you’re lucky, get a refund.
Have you been working from home?
According to the popular financial news site Money Saving Expert, if you’ve had to work from home due to the pandemic you could be eligible for up to £125 in tax returns for the year 2021/22. Over two million people applied for this refund last year, and if you weren’t one of them, you could still apply, making your total potential refund £250.
Money Saving Expert’s Martin Lewis revealed that previously, workers were only eligible to apply for tax back on the days that they had to work from home. Due to a special coronavirus rule, now you claim a whole year’s worth of tax back. He wrote:
This is a special pandemic rule that was introduced for the 2020/21 tax year (which ended on Mon) but has been extended for 2021/22.
The UK’s government website has revealed that this tax relief opportunity only applies to those who have been forced to work from home and not those who choose to do so. The relief is intended to cover additional costs that may have incurred such as ‘heating, metered water bills, home contents insurance, business calls or a new broadband connection.’
Additionally, you may also be able to claim costs back on any equipment purchased, such as laptops and office chairs. In most cases, you can claim total tax relief on these items, but you'll need to prove that your gear is necessary for work and not intended for personal use.
How to make your claim
There are two ways to make your claim.
The first is that you can claim up to £6 per week from April 2020; by doing this, you won’t need to show any receipts. You will need access to a government gateway account that you can set up with your National Insurance Number and a recent payslip, P60 or UK passport.
Otherwise, those working from home can also claim the exact amount of any extra costs above the £6 limit. However, if you choose the second option, you will need to record your relevant receipts, bill, and invoices.
When it comes to filing your returns, you’ll receive your relief at the same rate at which you’d typically pay your taxes. The government website provides the most straightforward example:
For example, if you pay the 20% basic rate of tax and claim tax relief on £6 a week you would get £1.20 per week in tax relief (20% of £6).
It looks like working from home is finally paying off!