HMRC increased the weekly limit allowed to be paid to employees who have to work at home from £4 per week to £6 per week from 6 April 2020.
This amount can be paid without the employer justifying the expense or the employee having to keep records to calculate the actual cost.
This is a flat rate and does not need to be pro-rated for part time employees.
If the employer does not pay the amount, the employee can claim the relief from HMRC. Employees can claim by post, telephone, on their tax return or via the new P87 micro-service HMRC launched on 1 October 2020.
Usually, to enable a claim to be made, the employee needs to show that their home is there work place (substantive duties performed at their home and alternatives are not available or they have chosen to work at home).
The good news is that HMRC have confirmed that due to the pandemic there is a relaxation of the rules and relief is available for employees who work at home on a regular basis for all or part of the time as a result of the Coronavirus are entitled to the £6 per week (must ensure the employee has not chosen to work from home).
As an example, the employer cannot accommodate the employees in the office due to social distancing rules, then the employee can claim even if this is only part of the week.
Please note the £6 per week does not cover business calls on telephones and an employee can claim additional relief for the extra business cost. Also, if an employee costs exceed the £6 per week they can claim the higher amount – the £6 per week is to cover the work part of the home expenses (like share of rent or mortgage interest, heat and light). The £6 a week is easier to calculate and claim.
Even if you do not think you have incurred any extra costs, you are still entitled to claim so if you can afford it, why not gift the tax relief, claiming gift aid, which for higher rate tax payers would increase the savings.
The next step
For more information on claiming for working at home, please contact Clive Gawthorpe or your usual UHY adviser.