Working from home: Claiming HMRC’s £125 tax cut has become more difficult.


The popular tax cuts for telecommuting, which gave some boost to the finances of many during the pandemic, have become harder to claim and most employees are no longer eligible.

With millions of people back in the office at least part of the week, experts say they can now claim a tax cut for working from home only if stringent conditions are met.

Some commentators are urging employees to check the PAYE tax code. Because if HM Revenue and Customs had included remedies when you were no longer eligible, you could potentially result in unexpected tax bills.

But the good news is, if you’ve had to work from home and haven’t responded to your claim, it’s not too late. You can continue to bill for the previous year.

Tax cuts related to telecommuting were introduced before the pandemic and were introduced almost 20 years ago. But in 2020, the government relaxed the rules, allowing millions of people forced to work from home during lockdowns to claim tax cuts of up to £125 per year.

In the fall of 2020, HMRC launched an online portal where employees can claim without having to provide receipts or do complex calculations. And to make work easier, eligible workers can claim benefits for a year, even if they only have to work from home for one day during the tax year.

Perhaps not surprisingly, this was a popular tax cut. Millions of people have successfully claimed it, and aid costs soared from around £2m a year before the crisis to nearly £500m in the two years of the pandemic. according to the report.Some people probably expected to be able to claim again.

Tax cuts were offered to workers when the employer ordered them to work from home instead of choosing to work from home and the company did not receive housing payments.

Once the application is approved, the portal adjusts the individual’s tax code and receives a tax deduction directly through the payroll.

Your claim was based on the assumption that you were reimbursed for taxes you would have paid on that amount because you incur expenses of £6 per week while working from home.

For base rate taxpayers, the reduction was £1.20, which is 20% of £6. Higher rate taxpayers can claim 40% of £6: £2.40.

That means you could cut the taxes people paid by £62.40 or £124.80 respectively for the year.

This relief relates to household expenses such as gas and electricity, metered water, and work phones, but the rules don’t allow “work-related” full bills to be charged.

Tax experts say the rules haven’t changed. Instead, the gradual easing of Covid restrictions means the situation most people find themselves in. As a result, the HMRC has been updated. guide To make it clear that you cannot claim relief if you have a choice factor in working from home.

Joanne Walker, technical director of the Low Income Tax Reform Group, said that although regulations were relaxed in favor of employees in 2020-21 and 2021-22, as of April this year, the HMRC is again fully compliant.

As before Covid, she says, people can now claim a tax cut only if they meet the conditions set out in the HMRC. Employment Income Manual 32760. These rules are very strict. This should usually be the case, for example, if there are no facilities available to perform the work on company premises.

Robert Salter, director of customer tax at accountant Blick Rothenberg, recently said that employees should check the tax code to see if the HMRC includes a deduction. “In these cases, you will need to contact the HMRC to amend your coding notice unless you are still eligible for relief in 2022-23. Otherwise, there will be additional taxes to be paid at the end of the tax year.”

He added that telecommuting relief will only be available starting April 6, 2022, if the employer specifically requires it. It is contractually considered 100% telecommuting.

“For example, if an employer allows an employee to work flexibly (i.e. in the office or telecommuting to suit each individual), home office relief will no longer be available for tax year 2022-23.”

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