Taxation and WFH: views from accountants wanted

"HMRC recently confirmed that the relaxation of the home working rules that applied for the past tax year (2020/21) due to the Covid-19 pandemic would be allowed to continue for the whole of the 2021/22 tax year. In short, for anyone who's able to keep WFH, that's a massive win. "In practice, this means that either the basic £6/week or £26/month, or a calculation of the extra heat, light, metered water and any business calls that aren't reimbursed by the employer, can be claimed as tax relief for the full year. "This changes an individual's tax code and, most importantly of all, generates more take home pay for the employee as a result of less tax being deducted from their wages. Claims can be made online, using the new P87 service, by phone, or by adding to your tax return. Be sure not to miss out."

"If you are not being paid expenses by your employer for working from home, you are able to claim £6 per week working from home allowance from April 2020. "For a 20% tax payer, this allowance will save you £1.20 per week, which for the whole tax year will net you a tax saving of £62.40. "Once you've applied for it through your HMRC Online account, it gets added to your tax code, which reduces the tax you pay through your employer. You only need to apply once for the whole of the tax year."

"If you have to work from home, there’s a working from home allowance. This amounts to a tax-free income of £6 a week if your employer pays you. If not, you can claim the tax relief back, which means, if you’re a basic rate tax payer, you’ll receive £62.40 back over a year — and £124.80 if you’re a higher rate tax payer. This covers things such as gas, electricity, water, any business phone calls and internet usage. "If you’ve spent more, you can calculate the difference and make a claim for it, but you’ll need the evidence behind it. "If you’ve had to buy equipment such as a laptop, chair or mobile phone, then you can claim the tax relief on these costs, too. So if you’ve spent £60 you can get £12 back if you’re a basic rate tax payer and £24 if you’re a higher rate tax payer. "If you’re a director and have built yourself a home office in the garden, then seek advice, as you may be able to rent it to the business or claim for some costs associated with it. But there’s lots of implications on this one so seek advice from an accountant."