You may be able to claim tax relief for additional household costs if you must work at home on a regular basis, either for all or part of the week. This includes if you must work from home because of coronavirus.
You may be able to claim tax relief for:
- gas and electricity
- water
- business phone calls, including dial-up internet access
- office furniture and equipment
- stationery and supplies
You cannot claim for the whole bill, just the part that relates to your work.
How much you can claim
You can either claim tax relief on:
- £6 a 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’ve incurred above the weekly amount – you will need evidence such as receipts, bills or contracts
You will get tax relief based on the rate at which you pay tax. 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).
How to claim
You can complete the P87 form online and send to HMRC – here
You can complete an online claim, you will need to have a personal HMRC account – you can open one here (go to section “claim online”) and then log into your personal account and follow the steps.
If you complete a self-assessment tax return, you can claim the expenses in the employment section.
Please note, if your claim is more than £2,500 you will need to fill in a Self-Assessment tax return.
How do I practically receive the tax relief?
Once HMRC have received your claim (look above at how to claim), HMRC will change your tax code, granting you a higher personal tax allowance and you will be taxed at lower rate via payroll, so your monthly net salary will increase.
If you complete a self-assessment tax return, this will lower your total employment income and depending on your circumstances, you will receive a tax refund from HMRC.
