If like many businesses you have had to take things online, working remotely with your staff from home during 2020 and 2021, they can submit a tax claim of up to £125.00 for 2021/22 tax year. If they also worked from home last year (tax year 2020/21) then they could be eligible for up to £250.00 tax relief for both years.
Are they eligible?
• They will need to have started working from home during the pandemic.
• Encountered higher costs due to home working.
• Working from home costs not already been covered by you, the employer.
How can they claim?
With so many of the UK population still working from home to some degree, the government set up an easy to use website making It easier than before to claim back tax relief: https://www.gov.uk/tax-relief-for-employees/working-at-home
If their application is successful their PAYE tax code will be changed and they will be able to take home more of your income tax.
The tax relief they will receive depends on their income tax band. All taxpayers can get a flat-rate of tax relief on £6 a week; basic-rate taxpayers will gain £1.20 a week (20% of £6), which equates to £60 a year. Higher-rate taxpayers can gain £2.40 a week, which is 40% of £6. This equates to £125 a year.
They can claim more and submit evidence if they have incurred more costs working from home.
Business owners and self-employed.
Self-employed workers can claim for more costs when working from home, such as a proportion of the costs when lighting, heating, cleaning, insurance, mortgage interest, water rates and general maintenance are used for work.
To work out the proportion, you’ll need to account for the amount of time you’re using your home for work, and in some cases the size of the area within the home that’s used for work purposes.
For example, if you work in a study you’d only be able to claim for the costs of heating that room while you work.
2021 Budget Announcement
Earlier this year Rishi Sunak announced a number of schemes and support plans for small businesses, these include:
• Restart Grant
• Help to Grow scheme
• Self-Employment Income Support Scheme
• Recovery Loan Scheme
• Super-deduction tax break for investment
• Business rates holiday
• Reduced VAT for tourism and hospitality
• Relief as no increase to Capital Gains Tax
You can find out more about these schemes and how they could apply to you and your business here.