Throughout the COVID-19 pandemic, the wholesale message was consistently to ‘work from home if you are able’. As the country begins the transition back to normality following the lifting of restrictions across England on 19th July, dubbed ‘Freedom Day’, many employers will be encouraging employees to return to working from the office, be it on a full or part time basis.
Workers who have had the resources and ability to continue their work from makeshift home offices for all or some of the pandemic to date will have likely incurred additional costs for doing so. They will have used more electricity to run their computer, light their workspace and seen an increase in their heating bills throughout the cold winter (and summer, this is the UK!). In recognition of the homeworking requirements imposed by the pandemic, employees who do not receive reimbursement from their employers for are able to claim tax relief for those extra costs incurred while working from home.
You can additionally claim tax relief on things that you use your own money to pay for, which you are required to purchase for your job. You can only use said things for your work. You will be unable to claim for tax relief if your employer gives you either of all the money back, or an alternative option that you decline to use (such as a different model of a laptop or computer). In order to be eligible, you must have paid tax during the year and the relief you receive is based on what you have spent and the rate at which you pay tax.
For example, if you spend £100 and pay tax at the basic rate of 20%, the tax relief you can claim is £20. If you are a higher rate tax payer at 40%, you would receive relief of £40. The most common expenses that are eligible to claim tax relief on are as follows:
Working from Home
You may be able to claim tax relief for:
- Gas and electricity
- Metered water
- Business phone calls
You can either claim tax relief on:
- £6 a week from 6 April 2020 (for previous tax years the rate is £4 a week) – you will not need to keep evidence of your extra costs. For basic rate taxpayers, you would receive £1.20 per week.
- The exact amount of extra costs you’ve incurred above the weekly amount – you’ll need evidence such as receipts, bills or contracts.
Uniforms, work clothing & tools
You may be able to claim tax relief on the cost of:
- Repairing or replacing small tools you need to do your job (for example, scissors or an electric drill)
- Cleaning, repairing or replacing specialist clothing (for example, a uniform or safety boots)
You can either claim tax relief on:
- The actual amount you’ve spent – you’ll need to keep receipts
- An agreed fixed amount (a ‘flat rate expense’ or ‘flat rate deduction’). You can check if your job has an agreed flat rate expense here.
You cannot claim tax relief for PPE. If your job requires you to use PPE, you employer should either provide this to you free of charge, or reimburse you for the full cost if you pay for this with your own money.
Vehicles used for work purposes
You may be able to claim tax relief if you use cars, vans, motorcycles or bicycles for work. This does not include travelling to and from your work, unless it’s a temporary place of work. How much you can claim depends of whether you are using a vehicle you have bought or leased with your own money, or a vehicle owned or leased by your employer.
If you use your own vehicle or vehicles for work, you may be able to claim tax relief on the approved mileage rate. This covers the cost of owning and running your vehicle. You cannot claim separately for fuel, electricity, road tax, repairs or your MOT.
To work out how much you can claim for each tax year, you will need to keep records of the dates and mileage of your work journeys and take away any amount that your employer pays you towards your costs. The approved mileage rates for vehicles are as follows:
Professional fees and subscriptionsIf you use a company car, you can claim tax relief on the money you have spent on fuel and electricity for your business trips. You’ll need to keep records to show the actual costs incurred.
You can claim tax relief on:
- Professional membership fees, if you must pay the fees to be able to do your job
- Annual subscriptions you pay to approved professional bodies or learned societies if being a member of that body or society is relevant to your job
You cannot claim tax relief on life membership subscriptions, or for the above expenses that you have not paid for yourself or are not approved by HMRC.
Travel and overnight expenses
You can claim tax relief for money you’ve spent on things like:
- Public transport costs
- Hotel accommodation if you have to stay overnight
- Food and drink
- Congestion charges and tolls
- Parking fees
- Business phone calls and printing costs
Remember, you cannot claim for travelling to and from work, unless it’s a temporary place of work, as these are expenses that are incurred to put you in the position to do your job, and are not incurred as a result of performing the job.
You can check if you can claim for tax relief here. You are able to claim online, however if you are registered for Self-Assessment then you would be required to make this claim via this return.
For some claims, you must keep records of what you’ve spent. You must claim within 4 years of the end of the tax year that you spent the money.
If your claim is for the current tax year, HMRC will usually make any adjustments needed through your tax code. If your claim relates to previous tax years, HMRC will either make adjustments through your tax code or give you a tax refund.
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