Are you entitled to more money?

Get help to offset the cost of working from home While many of us have returned to the office postpandemic, some are still working from home fulltime or splitting the days they do.

But as the cost-of-living crisis continues and our electricity bills look more like Elton John’s florist bill, it is even more pertinent to ensure you claim what you can to maximise the tax breaks you are entitled to.

Employees who work from home can claim tax relief on £6 per week, which equates to £62 a year for a basic rate taxpayer or £125 a year for a higher rate taxpayer.

If you have not yet applied, you can claim for up to four years if you were eligible –albeit the amount was £4 prior to April 2020.

To be eligible, you must have been told to work from home by your employer and you must not be receiving expenses directly from your employer for working at home.

You do not need to complete a selfassessment to claim, however those that do can claim their expenses this way.

To claim, you simply go online and use the HMRC portal. More details can be found at gov.uk/taxrelief-for-employees/workingat-home.

Because of the pandemic, many employees will find they qualify for the benefit.

Once your application has been approved, your tax code will be adjusted for the tax year and your employer will then know how much tax to deduct from your pay.

You will receive the rebate directly through your salary.

If you are a basic rate taxpayer, you will receive around £5 extra added to your pay each month.

This increases to around £10 if you are a higher rate taxpayer. If you have a backdated claim, you will receive a lump sum in your next payslip. If the money doesn’t come close to meeting the additional costs you have incurred by working from home, you can either complete a self-assessment for each year or complete a P87 form that allows employees to claim back expenses of up to £2,500.

Additional allowable expenses include heating and lighting, metered water, additional insurance costs and telephone and internet access charges.

Costs must relate to the work area of the home. Costs that are the same, whether or not you work at home, cannot be included.

Specifically, this includes your mortgage interest, rent, council tax and water rates.

You don’t receive the full cost back – only the tax relief on these costs.

So if you, for example, spent an additional £500pa, a basic rate taxpayer would benefit by £100.

For further money planning information, go to WarrenShute.com.