People who work from home could get as much as £702 a year back from HMRC if they backdate a tax allowance they are owed for the past four years as well as this year.
The self-assessment tax return deadline from HMRC has passed for the 2023-2024 tax year if you normally file a tax return, but don’t worry, as you can still make a claim directly with HMRC and backdate the claim for another four financial years too. The allowance helps meet the cost of expenses such as electricity, heating, or broadband incurred by working from home. If you didn’t submit a self-assessment tax return before January 31 you can still claim the money back directly from HMRC via the gov.uk website, here.
But the catch is that you’re only eligible if you have to work from home, such as if your employer makes you work from home or you live too far from the office to be able to commute in.
If you choose to work from home, you won’t be eligible for the tax relief. So, you wouldn’t be eligible for the money if you have a permanent working-from-home contract.
The taxman will let you claim either the exact amount you spent on phone calls, gas, and electricity for work or a flat £6 a week rate, which would equal £312 across the year – you then get 20% of that back as tax relief if you are a basic rate taxpayer, or £62.40 per year.
If you pay tax at the 20% tax rate, that makes £62.40 of tax saved for each £312 you claim per year. That £62.40 of tax then becomes £312 in total saved across five years if you claim for this year and four more backdated years.
If you pay tax at 40%, ie you earn over £50,270, the relief is based on the 40% bracket. That means you save £124.80 per year, or £624 across five years.
Taxed at 45%, ie you earn over £125,000, it becomes £140.40. Across five years, that’s £702.
The Government explains: “You may be able to claim tax relief for additional household costs if you have to work at home for all or part of the week.
“You can claim tax relief if you have to work from home, for example, because your job requires you to live far away from your office; your employer does not have an office.
“You cannot claim tax relief if you choose to work from home. This includes if your employment contract lets you work from home some or all of the time; your employer has an office, but you cannot go there sometimes because it’s full.”
“You can either claim tax relief on: £6 a week or the exact amount you’ve spent.
“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).
“Higher rate taxpayers would receive £2.40 a week (40% of £6 a week). Over the course of the year, this could mean customers can reduce the tax they pay by £62.40 or £124.80 respectively.”
