How can I claim back tax if working at home during coronavirus crisis?

A top Suffolk tax expert has offered advice on how to claim back money if you are working from home due to Covid-19.

According to Yvonne Graham, a tax manager at accountancy firm Ensors, people who are having to work from home during the pandemic can claim back tax in several ways.

She said: “For those of us – including me – who are now working from home because our offices are closed due to coronavirus, you can claim money back in a few ways.

“This is only if your employer requires you to work from home. If your office is open as normal and you choose to work from home, then you can’t claim it.

“If your office is closed and you have to work from home because there is no alternative then you can claim this.

“Your employer can pay you an amount to cover the extra expense of working from home – the light, gas and electricity and all that sort of stuff. That’s a maximum of £6 a week.

“You just ask your employer and they pay it. There’s no tax or national insurance to pay on this. But they are not obliged to pay you this.”

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But not all employers will agree to pay this.

Mrs Graham said: “If your employer won’t pay the extra £6 – like a lot of employers – you can make a claim for tax relief on the £6 a week.

For most people the easiest way to claim this tax back is to fill in a form called P87.

“If you do it now for the current tax year, what they will probably do is put it in your PAYE code and your PAYE code will go up a little bit for the extra deduction.

“So that’s tax relief on £312 a year – if you’re a basic rate taxpayer you’ll save £60 a year.

“It’s not going to make a massive difference to anybody’s life frankly, but it’s better than nothing.

“It’s much better if your employer is willing to pay the £6 a week – over a year that would be £312 – but I suspect a lot of employers would not be prepared to pay that.”

If an employee is incurring significant extra costs by working from home, they can also claim these back.

“If your actual costs are considerably higher – for example if somebody had to use their phone at home a lot and it was costing them an awful lot of money – they can make a claim for the actual expense rather than just the £6 a week.

“They would have to identify the actual expense and know that these are higher than £6 a week where someone is incurring a lot of extra expense by working from home.”

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After a recent change made by HM Treasury, employees can also gain tax relief on equipment that they have had to buy in order to work from home.

Mrs Graham said: “If people have had to buy equipment to work from home and the employer reimburses the cost, that can be done free of tax.”

But the employer has to agree to reimburse the cost of any purchase.

She warned: “It has to be reasonable or the employer won’t pay for it.”

In order to be reimbursed, she said that an employee must speak to their employer.

She said: “The employer doesn’t have to report it or anything, it’s just not going to be taxable.

“I can’t imagine most employers would be prepared to do this for everybody. But if somebody has a bad back and needs a special chair in the office, then they may pay for them to have one at home as well”.

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