Work from Home Tax Break

What is Work From Home Tax Break?

Around 42 per cent of people are working from home full time. While 26 % are pursuing their normal routines. Working from home is the new work model most of the businesses are adopting to thrive in this period when the economy is struggling. In times like these, you might be desperate to find out ways to help you out with the taxes. What is Work from Home Tax Break? How do you Claim One? Here is a quick detail about it.


If you’re an employer, luck is on your side. As many employers allow you reimbursement of all your expenses. You have invested in equipment like LEDs, laptops, and other things. So what expenses do you claim is the real question here. Companies like Twitter and Facebook have extended work from home indefinitely and some of these conglomerates have extended their support by offering employees all the necessary equipment required. 


What Happens When Someone Decides to Switch?


All the assets acquired by a certain company must be returned back as per the laws identified by the government. Section 139 identifies that any expense claimed during a certain disaster can be redeemed easily. 


Can you Claim Tax Relief?


The main question that comes to one’s mind is that since you’re literally not going out to work, can you still claim tax relief? 


Good news: you’ll be able to claim some household tax relief either for all part or one week as per the guidelines identified by HMRC. What are some additional costs that you can claim, you ask? Some of these expenses/costs that you can claim back include heating and electricity bills, home insurances, business calls and reimbursements for broadband connections.


If you’re expecting any mortgage returns, rents or council interests are not included in this cost. 

Work from Home Tax Break

Let’s Move On to the Calculations


There’s absolutely no need to keep evidence of your existing expenses. Let’s dig into what costs can be claimed overall? Some of these costs include: 


  • If you’ve spent £6 a week from April 2020, you can always expect a tax relief. 
  • Whatever costs that came after the weekly expense can also be claimed. All you need is some sort of evidence like receipts, bills or contracts to get it all sorted. 


Know that your tax relief totally depends on the amount of tax you’ve paid. You can claim around 20% of your tax as tax relief. Let’s say if you’ve paid around £6 tax, you can expect £1.20 in tax relief. If you’re expecting more than that, the good news is that you can always claim the expense if you’ve got enough paperwork. 

What’s the Process?


Now that we’ve got a basic idea of what amount of taxes can be claimed in the tax relief, let’s understand how it works. How do you make a claim? 


There are two ways to claim your tax return. You can wait for a year and claim the expenses with the annual tax return or you fill out a form P87 that’s available online or through a government gateway or through a paper. 


You can also get the tax code changed regularly for your savings if you’re working from home. It’s always a good idea to wait until you get back to work to claim your savings.


What’s the List of Other Claimable Things?


Remember that if you chose to buy an office chair or a computer, it can be claimed back. Go ahead and claim tax relief on what you’ve already bought. Keep a record and claim the exact amount. 


Apart from the assets, you can further claim for work or telephone calls at a flat rate of £6. If you’re expecting your employer to pay the rent, mortgage, interest, or water bills, know that it cannot be claimed.  


Let’s Dig into a Case Study


Anna Holy works for an IT company in Bermingham. She wants to claim the work expenses from the start of Covid. These include the assets she had to buy and the telephone calls she had to make to attract more clients. 


Let’s say it has been 7 months since she made the claims. While filling out form P87, the expense calculation for a period of 7 months will be £6 x 7 = £42.


The claims were made online, and she found the online forms really straightforward. As per Anna, the tracker on the website made the process even easier. 

Cut to the Chase


HMRC has made tax claims really easy. The P87 form allows you to claim your expenses whenever you want. Now that we’re clear about what the claimable expenses are in terms of assets and bills, claiming your tax returns should be a piece of cake. 

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