Due to the pandemic COVID-19 situation, HMRC working from home allowance became a popular way to carry out business in an uninterrupted way. This has also increased the usage of online portals. According to a recent observation, 50,000 individuals used online portals as taxpayers to make a claim for tax relief while they were providing their services from home.
Learning the need, HMRC has realised the need to launch such an online portal that will simply deal with the tax relief for the extra expenses that employees are bearing by providing their services from home to ensure that the virus spread is stopped.
This online portal was launched on the 1st of October. Further, in April 2020 employees were getting an amount of 6 pounds every week. This is to cover the additional expenses that employee has to deal with because of work from home options.
Moreover, the employees who did not get the working from home allowance from their employers could claim tax relief by using the online portal and informing HMRC.
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HMRC Working From Home Allowance – How Does It Work?
The procedure is as simple as anything can be. The employee has to check the eligibility and if one is an eligible taxpayer, he can simply claim for the tax relief. The tax relief amount will depend on the rate of tax that a person pays.
For instance, an employee is paying 20% tax which is the basic rate. Now if the employee claims tax relied on the amount of £6 per week. He will get a tax relief amount of £1.20 every week. Which is 20% of £6 every week. Whereas the case of higher taxpayers would be a little different as they will receive an amount of £2.40 every week. This comes with the rate of 40% tax payment.
What Is Required from You?
If the employees are getting the basic rates, there is no need to prove through shreds of evidence that their bill amount is increased due to work from home routine. However, if the employee intends to apply for more than a basic £6 every week. There is a possibility that the employee has to prove and provide pieces of evidence of the increased amount of bills.
As per the explanation of HMRC, the majority of employees claim for the expense of the following:
- repairing and replacing tools
- business mileage
- professional subscriptions
- branded uniforms
People who belong to the healthcare, retail or food sector are more inclined towards making the claim of HMRC Working From Home Allowance. It is highly recommended by HMRC to use the newly launched online portal to make the claim for tax relief. This ensures the error-free process of clearing all the due amount of tax relief.
In the year 2018-19, people used agent services to make claims for tax relief rather than doing it directly from the HMRC. This ended up paying the commission fee to the agents.That’s why HMRC suggests claiming directly from the portal and saving the commission fees.
Once you have made the claim successfully, the claim is approved and the employee will start receiving the amount directly through the amount of salary. The good part is that HMRC gives a reminder to the workers who belong to sectors like care home staff and health care workers to claim tax relief. The amount of work-related expenses like washing and cleaning of the uniform is included as well.
Such employees who repair tools, replace or clean uniforms or pay an amount for subscriptions can immediately get in touch with HMRC. And check their eligibility for tax relief on the expenses of the above-mentioned work.
Now that you have developed a basic understanding of HMRC Working From Home Allowance and the online portal launched for the ease of employees. You may make your claim for tax relief in a handy and convenient way.
However, this is suggested to first check if your expenses make you eligible to start with the process. We hope these few minutes of reading will help you to save your commission fee amount that was going to the agents before the understanding of an online portal.
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Disclaimer: The information about HMRC Working From Home Allowance provided in this article including text, graphics, and images is general in nature and does not intend to disregard any professional advice.