Saturday 27th February 2021

HMRC

Even HMRC knows that every little helps…

If you’re still working from home because of this pandemic, or your business is intending to ask their staff to do so going forward, it’s worth checking out what home workers can claim as expenses with HMRC. 

Here’s the good news…

With respect to calculating your income tax bill, HMRC allows home workers to claim up to £6 a week in total as an expense for things like electricity without needing any paperwork. They don’t repay that sum to you or your staff, of course, but it does reduce their tax bill by up to £1.20 per week for basic rate taxpayers, and £2.40 for a higher rate taxpayer. NB: You are only eligible to do this if you’re working from home because you have to, and not just because you choose to.

From an employer point of view, of course you can offer your staff a £6 a week allowance for excess costs, which you then pay to your employee and you claim as a cost against your business. This will then prevent them from getting the tax benefit, but we doubt they’ll complain.

However, whichever way you want it to work for your business… it’s still £312 per year that can be claimed as a business cost that will reduce someone’s tax bill. And we like that!

How do you claim? 

The home worker can either claim for it when they do their annual tax return, or on a P87 form which can be downloaded electronically from HMRC’s website. If they know they’ll be going to work back in the office at some point, it makes sense to claim once their home working stint is over, simply because it means they only have to submit a claim once. For those who are shifting to working from home permanently, however, they can get their tax code changed. 

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