If you’ve started working from home due to Covid

Don’t forget to change your tax code on the government website. Also worth letting your house insurance know, which may incur a small fee, but probably not for this year.

Let’s not turn this into a discussion about whether the tax relief is right or not, please. It’s just a PSA that I’ve been meaning to post over the last few weeks but it hasn’t felt right as new restrictions are brought in costing more jobs. But it’s an important PSA and right now felt like a not awful time to say it. It’s not an awful lot of money but it will help with things like the extra utility costs etc.

 

If you’re employed you just need to go into the government gateway and let them know. All it basically does it add extra onto the tax free allowance. I think it’s about £6 a week extra or something? We’re not talking big numbers, but it’s still worth doing. Especially if you forgot for the year you can get a good chunk as a refund. Up to about £120 for the year or something I believe depending on tax brackets etc.

If you’re self employed or otherwise fill in a self assessment, it’s a bit trickier and you need to do it through your tax returns.

 

It’s really simple. If you already have a gateway account it takes about 2 minutes. If not, creating the account takes about 5, just need your passport and a pay slip if I remember right.

 

If you do a tax return it’s more complicated. You need to put it in as expenses I believe. A lot simpler if you’re PAYE!

 

Info here

https://www.gov.uk/tax-relief-for-employees/working-at-home

 

I’m assuming we can just retrospectively claim it when we do tax return?

 

It works out about £1.20 a week for basic tax rate payers.

How much you can claim
You can either claim tax relief on:

£6 a week from 6 April 2020 (for previous tax years the rate is £4 a week) - you will not need to keep evidence of your extra costs
the exact amount of extra costs you’ve incurred above the weekly amount - you’ll need evidence such as receipts, bills or contracts
You’ll get tax relief based on the rate at which you pay tax. For example, 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).

 

There are two systems. The article here is a good read and explains the ins and outs of both of them.

https://blog.moneysavingexpert.com/...g-from-home-due-to-coronavirus--claim-p6-wk-/

My son's firm has opted for the first method and he receives an extra £6 per week, tax free.

 

As regards Insurance companies charging - more I never understood that. Occupancy during the day reduces risk i.e. burglary when everyone is out at work and also fires breaking out e.g. electrical fault going unnoticed. If as they claim, premiums are based on 'risk' (yeah right!) rather than what they can get away with then, if anything, a small reduction would be due. (Holiday homes are charged at a higher rate simply because they are unoccupied for longer periods and yet the same companies claim working from home increase risk!! )
Caveats are no business 'meetings' allowed due to public liability/3rd party risk increase and non hazardous occupations only ( e.g. office work)

 

Can I just point out that the tax relief is only if your employer has been forcing you to work from home for the last 3 years (they do sometimes check apparently) with no option to go into work. That may be the case of course, I just wanted to let you know incase you applied and there were potentially any problems.

 

Just a point here.
I’m being told to stay at home. Normally I’d be out and about. So I’m in using more electric and gas.
More cups of tea and coffee. More biscuits being eaten. Tv on music on watching Netflix. It all adds up.
What’s the chances of a financial help from the government to help in all this?

 

Not same issue, but Covid related . What if you are a single parent and working and expected to do home schooling. How do you manage it?

 

With great difficulty. They also weren't considered first lockdown when children weren't allowed in shops.

 

I would imagine the home schooling doesn't happen.

 

I'm giving this a bump as they've just made it easier to claim and it now takes around 30 seconds to a minute to do (you just have to log in to your Government Gateway ID). Basically, you tick that you have had to work from home for at least one day this year and that your employer has not paid you anything extra towards expenses incurred during that time. You then state what date you started working from home and click submit. That's it. There's no end date as it just runs from that date until the end of this tax year. HMRC has said that they are paying everyone the full year as it's cheaper for them to do that than to process multiple claims from everyone with different start and end dates.

Link here: https://www.gov.uk/tax-relief-for-employees/working-at-home