Employees can claim from HMRC while working from home

Coronavirus, Personal Tax,

With so many of us working from home over the last few weeks, it’s only a matter of time before Employees start to ask whether they can reclaim any increased costs of doing so! Thankfully HMRC have provided an answer; employees can claim a flat rate of £6 per week.

Historically, such a claim could only be made if evidence of household bills were provided, but the rules have now been changed. HMRC have given the reason as “for ease of administration”.

HMRC have said that from 6th April 2020 they will accept that employees who are required to work from home can claim £6 per week without having to justify the figure. For weeks prior to the 6th April 2020, that figure is £4 per week.

If the employee wants to claim more than this amount, evidence of the additional costs will have to be provided.

How do employees make their claim?

Employees can claim the deduction for the additional costs directly from HMRC, either by including it in their tax return, online or by post on Form P87, or by phoning HMRC on 0300 200 3300.

Can we go back to previous years?

Yes! If you have team members who’ve been working from home for some years under a formal home working arrangement, you can. The employee can go back up to four years in making their claim, as long as those expenses haven’t been claimed previously.

Can the Employer pay this amount and recover it?

If, as an employer, you’d like to make this easier for your team, you can pay the claim amount to the employee, which becomes an employment expense. The amount then becomes allowable for tax, either against your Corporation Tax or the equivalent.

I’ve previously claimed Use of Home; do I need to change anything?

Probably not! If we’ve historically claimed on your behalf for Use of Home, we’ll carry on as normal, as we can usually increase the amount you’re eligible for. This is more relevant to employees who’ve been working from home as a result of the Lockdown situation.

As ever, please shout if you’d like to talk this through!

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