Your employees may be entitled to claim tax relief whilst working from home

Since the start of the Covid-19 pandemic, many businesses across the country have had to ask their employees to work from home in order to keep trading. This means that employees are having to find the space and equipment to effectively work from home. If this is the case for your employees, you may be able to advise them to claim tax back on the costs they have incurred.

For those who have been unable to borrow furniture and equipment from their workplaces, they might have found themselves incurring additional costs on items that they wouldn’t have otherwise purchased.

In addition to purchasing physical items to be able to work efficiently, employees might have been affected in other ways:

  • They may have noticed their utility bills creeping up
  • They may have had to take out a faster broadband connection
  • They might have consistently higher  landline bills to cover the business calls.

Employees may be able to get money back for equipment and additional household costs

‘Tax relief’ means that you pay less tax or get tax back on the costs you have incurred from specific business expenses.

Your employees may be able to claim tax relief on the equipment they have bought, such as a laptop, chair or mobile phone. They may also be able to claim tax relief for additional household costs if they have to work from home because of coronavirus.

How it works:

  • Employees can only make a claim if you have asked them to work from home for all or part of the week.
  • From 6 April 2020 the tax relief is based on £6 per week or £26 per month. The GOV.UK website states you can claim tax relief on the exact amount of extra costs you’ve incurred above the weekly amount.
  • You will not need to produce evidence of your extra costs, such as receipts, bills or contracts.
  • You cannot claim tax relief if you choose to work from home.
  • You cannot claim tax relief if your employer already reimburses you all the money for your expenses.
  • Tax relief is paid by the government and not the employer. Your employees tax codes will be adjusted, reducing the tax they pay.

Example – you purchase a PC monitor for £100 and pay tax at a rate of 20%, the tax relief you can claim back is £20.

All you need to do is tell your employees to follow some simple steps from GOV.UK

Making a claim is very simple. All you need to do is tell your employees to follow this link to GOV.UK and follow the step by step process to check if they can claim tax relief for their work expenses.

To claim expenses, your employee will need a government gateway user ID and password. You can create an ID if you don’t have one, with the  following information to hand:

  • Your National Insurance number
  • A recent payslip, a P60 or a valid UK passport

There are other ways you can support your team while they’re working from home

Of course your team will want to make back any money they can as they adjust their lives to this new way of working. But you can be doing more to help your team (and yourself!) than just supporting with the technical tax stuff.

Some of your team may have very little children, and may need to work evenings to fit home working around their families. Some might have older kids, and just need a break to check-in or pick them up from school. Some of your team may be living alone and finding it extra hard without their usual social interactions. You might even be looking to bring new members on to the team!

For all these reasons, I wanted to flag up some blogs we’ve written recently to support you with supporting your team.

Remember, you’re part of the team too. Anything we can do to make this transition easier, we’re here to talk.