HMRC Offers £140 Tax Relief to Home Workers: If you have been working remotely in recent years, you may be eligible for a tax relief payment of up to £140 from HMRC. This initiative is designed to help employees offset the extra costs incurred while working from home. Whether you are a full-time remote worker or only work from home part-time, this tax relief could provide significant financial relief.
HMRC’s £140 Tax Relief for Home Workers
| Key Aspect | Details |
|---|---|
| Tax Relief Amount | Up to £140 annually, depending on your tax band (Basic: £62.40, Higher: £124.80, Additional: £140) |
| Eligibility Requirements | Must be required by an employer to work remotely, have additional expenses, and not receive reimbursement from the employer. |
| Application Method | Apply online via HMRC’s portal or through a Self-Assessment Tax Return. |
| Claim Deadline | Can backdate claims for up to four years. |
| Official Website | HMRC – Working from Home Tax Relief |
This tax relief was introduced to help remote employees manage increased household costs, including electricity, heating, and internet usage. However, it is not automatically applied—you need to submit a claim. Below, we explain the eligibility criteria and the step-by-step process for claiming your tax relief.
Understanding the £140 Tax Relief for Remote Workers
The UK government initially introduced this relief in response to the pandemic when many employees were required to work from home. The scheme helps cover the additional expenses incurred by remote workers, such as higher utility bills and increased broadband usage.
Who Qualifies for HMRC’s Work-from-Home Tax Relief?
To be eligible, you must meet the following criteria:
- Your Employer Must Require You to Work from Home
If you are working remotely because your employer has instructed you to do so, you may be eligible. This applies even if your employer has implemented flexible work policies post-pandemic. - You Must Have Additional Home Expenses
The relief is meant for employees who have higher household costs due to remote work. This includes expenses like electricity and heating but does not cover standard living costs like rent or council tax. - No Reimbursement from Employer
If your employer has already reimbursed you for additional work-related expenses, you are not eligible to claim this tax relief. - You Must Pay UK Income Tax
Only employees who pay tax in the UK qualify for this benefit, which is applied via tax code adjustments.
How Much Can You Claim?
The relief is calculated as a flat rate, meaning the amount is not based on your exact additional costs but rather on your income tax rate:
- Basic Rate Taxpayer (20%): Can claim up to £62.40 per year.
- Higher Rate Taxpayer (40%): Eligible for up to £124.80 per year.
- Additional Rate Taxpayer (45%): Entitled to £140.40 annually.
Example Scenarios
- Emma (Basic Rate Taxpayer, 20%): Works remotely two days a week and incurs higher electricity bills. She can claim £6 per week, totaling £62.40 per year.
- John (Higher Rate Taxpayer, 40%): Works from home full-time and sees increased heating and internet usage. He can claim £12 per week, amounting to £124.80 per year.
How to Apply for HMRC’s Work-from-Home Tax Relief
Step 1: Verify Eligibility
Ensure you meet the following conditions before applying:
- Your employer has required you to work from home.
- You have extra household expenses due to remote work.
- Your employer has not reimbursed you for these costs.
Step 2: Apply Online via HMRC’s Website
- Visit HMRC’s official website for Working from Home Tax Relief.
- Log in with your Government Gateway ID (or create one if needed).
- Answer the eligibility verification questions.
- The system will determine your eligible relief amount.
- Submit your claim.
- Once processed, HMRC will adjust your tax code, reducing the tax deducted from your paycheck.
Step 3: Apply via Self-Assessment (If Applicable)
If you file a Self-Assessment Tax Return, you can enter your tax relief claim when completing your return. HMRC will adjust your tax accordingly.
Step 4: Confirm Your Tax Code Adjustment
After submitting your claim, check your tax code on your payslip to ensure it reflects the adjustment. If you notice any discrepancies, contact HMRC.
Avoid These Common Mistakes When Claiming
- Not Checking Eligibility: If you voluntarily chose to work from home without employer instruction, you do not qualify.
- Claiming Ineligible Expenses: Rent and council tax are not covered under this relief.
- Missing the Deadline: Claims can be backdated up to four years, but it’s best to apply as soon as possible.
Can You Backdate Your Claim?
Yes! If you worked from home in previous years but didn’t claim the relief, you can backdate claims for up to four years, potentially securing a substantial tax rebate.
Frequently Asked Questions
1. Can I claim if I worked remotely during the pandemic?
Yes, as long as your employer instructed you to work from home, you can claim for those years.
2. What expenses can I claim for?
You can claim for additional utility costs like heating, electricity, and work-related internet usage. Rent, council tax, and mortgage payments do not qualify.
3. How long does it take to receive the tax relief?
HMRC adjusts your tax code rather than issuing a direct payment. You should see the reduction reflected in your payslip within a few weeks.
4. Can self-employed individuals claim this relief?
No, this relief is only for employees. However, self-employed individuals can explore other tax deductions for business expenses.
By understanding and claiming HMRC’s work-from-home tax relief, you can reduce your financial burden and keep more of your hard-earned money. Be sure to check your eligibility and apply as soon as possible to take advantage of this benefit!