HMRC opens portal for WFH expenses claims

Over 50,000 taxpayers have used a new online portal to claim tax relief for working at home during the pandemic in the first ten days of its operation, HMRC has revealed

Launched on 1 October, the online portal is designed to be simple to use and has been set up to process tax relief on additional expenses for employed workers who have been told to work from home by their employer to help stop the spread of coronavirus.

HMRC figures show it received more than 54,800 claims between 1 and 11 October.

From 6 April 2020, employers have been able to pay employees up to £6 a week tax-free to cover additional costs if they have had to work from home. Employees who have not received the working from home expenses payment direct from their employer can apply to receive the tax relief from HMRC.

Eligible taxpayers 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) while higher rate taxpayers would the receive £2.40 a week (40% of £6 a week).

Over the course of the year, this could mean taxpayers can reduce the tax they pay by £62.40 or £124.80 respectively.

Employees do not need to provide evidence to show their bills have increased unless they are applying for tax relief on costs above the £6 per week flat rate, in which evidence of the increased costs may be required.

According to HMRC, the majority of tax relief claims are for repairing or replacing tools and branded uniforms, professional subscriptions and business mileage. Healthcare workers, people working in the food and retail sector and those in the construction industry are most likely to make a claim.

HMRC is encouraging individuals claiming tax relief for working from home to apply directly via the portal. Agents will not be able to use the new service to apply for the relief on a client’s behalf, which HMRC says is to ensure individuals receive 100% of the tax relief that is due.

The tax authority says that in the 2018/19 tax year, more than 500,000 taxpayers (66% of total expense claims) applied for the tax relief using an agent rather than directly from HMRC and will have had to pay fees or commission. It points out that those who are paid through PAYE can claim directly to HMRC.

Karl Khan, HMRC’s interim director general of customer services, said: ‘We want everyone to get the money that they are entitled to, so we’ve made the online service as easy to use as we can – it takes just a few minutes to make a claim.’

Once the application has been approved, the online portal will adjust an individual’s tax code for the 2020 to 2021 tax year. The employee will receive the tax relief directly through their salary and will continue to receive the adjustment until March 2021.

HMRC is also reminding employed workers, for example healthcare workers and care home staff, that they can also claim tax relief on work-related expenses, including cleaning their work uniforms.

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 instantly if they are eligible for tax relief on work expenses.

Useful links:

The online portal for working from home expenses

Claim tax relief for your job expenses information