How to claim £125 tax back if you’ve had to work from home during pandemic

Millions of people who have had to work from home due to the coronavirus pandemic could be entitled to £125 back from the tax man.

A little known ‘working from home’ tax rule means anyone who has been told to work from home during the pandemic can claim financial relief, up to the value of £125, to spend on bills and other home working essentials.

And you only need to have worked from home for one day to be able to claim the rebate from HMRC, reports The Mirror.

The money can be used to pay for items such as office equipment and stationary.

If you are a sole-trader, you can claim the money through ‘work expenses’ on your next self-assessment.

If you’re employed, you can claim the rebate from your employer or HMRC directly.

“If you’ve been required to work from home even for ONE DAY since 6 April… you can now legitimately claim tax relief for any extra costs for the WHOLE YEAR – worth £60 or £125,” consumer expert Martin Lewis said.

But it only applies if you’ve been told to work from home by your employer, so those who choose to work from home are not eligible.

The money is designed to help with extra costs associated with home working such as heating and a broadband upgrade.

Taxpayers who are eligible can claim tax relief based on the rate at which they pay tax.

For example, if an employed worker pays the 20% basic rate of tax and claims tax relief on £6 a week, they would receive £1.20 a week in tax relief (20% of £6 a week) towards the cost of their household bills.

You can claim £2.40 a week if you pay the higher 40% tax rate.

How to claim your tax refund

Workers can find out more and make a claim at gov.uk/tax-relief-for-employees/working-at-home.

It takes less than two minutes to find out if you’re eligible for tax back.

To claim the money, you’ll need a Government Gateway user ID and password.

If you don’t already have one, creating a Government Gateway ID usually takes about 10 minutes. It works best if you have:

  • your National Insurance number
  • a recent payslip or P60 or a valid UK passport

You’ll then receive the tax relief directly through your salary.

HMRC is also reminding employees such as healthcare workers and care home staff, that they can also claim tax relief on work-related expenses, including cleaning uniforms.

The extra money can help thousands of workers whose efforts are helping save lives during the coronavirus pandemic.

Employees who clean, replace or repair uniform or tools, or pay fees and subscriptions for their work, can apply online directly to HMRC and see if they are eligible for tax relief on work expenses.

The taxman also said that in 2018/19, two-thirds of those claiming for expenses used an agent, rather than using HMRC directly. They will have had to pay fees or commission.

But people who are paid through Pay As You Earn (PAYE) can claim directly from HMRC and keep all the money.

HMRC is encouraging customers claiming tax relief for working from home to apply directly, and said agents will not be able to use the new service to apply for the relief on a customer’s behalf.

This means customers will receive 100% of the tax relief due.

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Lancs Live – Cumbria