Work at Home Tax Relief

Monday September 14, 2020

We’d probably all have been a little happier about doing our homework if we’d been paid for it. The thing is, that’s basically what’s happening during the ongoing COVIC-19 pandemic. With so many workplaces either shut down altogether or strictly limiting the number of workers they’re letting in, big chunks of the country are setting up mini-offices in their own homes.

Working from home seems like a dream come true to a lot of employees – although it’s hard to imagine that dream involving quite so many glitchy Zoom calls or razor-sharp Lego bricks hiding in the shag pile. While your employees might be saving on their travel costs while putting their daily hours in on a laptop on the sofa, there are some hidden costs involved in working from your home. If you’re not used to the “home office lifestyle”, you might not even think about the extra cash you’re spending on business phone calls or energy until the bills arrive. Fortunately, for those actively being required to work from home, the taxman has them covered – at least a little.

Here’s how the system works. If you decide your workers have to work from home because of the coronavirus outbreak, they could well qualify for a tax-free payment of £6 per week from you. Obviously, for a lot of businesses, this is a lousy time to be digging around for extra cash, but it might be worth checking whether it’s an option.

Even if you can’t pay your employees any more right now, they could still be in line for some valuable tax relief. Instead of getting a tax-free payment from you, they can claim a tax break from HMRC directly on £6 of their pay, which is worth £1.20 a week for basic rate taxpayers. If their actual cost increases are higher than £6 per week they can make a bigger claim, but they’ll have to back it up with receipts or other evidence.

For those who’ve never claimed any kind of tax refund before, this can all be a bit nerve-wracking. However, working from home doesn’t necessarily mean extra homework. It can all be handled online via the HMRC website, and if all they’re claiming is the tax relief on £6 per week of their pay for working from home then they won’t need to show the taxman any records.

It’s still important to remember that this scheme only applies to employees who are being required to work from home during the outbreak. If they’ve still got the option to go into the office or workplace, but choose not to, they can’t claim anything.

Wherever you’re working, stay safe, look after each other and listen out for more Voices from the RIFT...

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