MARTIN Lewis is urging anyone who has had to work from home over the past year to submit a claim now and get up to £125 tax back.
The money guru issued the warning in his latest MoneySavingExpert newsletter ahead of the new tax year starting on April 6.
Millions of employees have been forced to work from home over the past tax year to help stop the spread of the coronavirus.
You can claim tax back for the year to go towards covering the cost of your increased energy bills during this time, even if you've only had to work from home for a day.
It's worth £62.40 for basic rate tax payers and £124.80 for higher rate earners.
Before the pandemic, you were only allowed to claim tax back on the specific number of days that you worked from home.
What you’ll need to make a working from home tax claim
YOU’LL need the following basic information to hand before you make tax claim via HMRC:
- Something to prove your identity – this could be a passport, driving licence, or you can answer various questions based on your credit file
- A P60 or payslip from July 2020 onwards
- National insurance number
- Your Government Gateway user ID and password or you can create a user ID if you do not already have one.
HMRC has launched a free tool to use to simplify the process for the 2020/21 tax year but warned it may not be around for long.
"There's no confirmation whether this will continue after April 6, so it may be trickier to claim then, so best to do it now," he wrote.
In his guide to claiming the tax back, he added that the government is yet to clarify whether workers will still be able to claim for the whole tax year, or if it will go back to the system before the coronavirus outbreak.
How to claim tax back
To cover the costs, your employer can effectively pay you £6 a week extra tax-free to cover expenses.
But with many firms struggling right now, it's more likely you'll instead claim tax relief on the £6 a week.
You don't get a cash pay out when you claim the relief, instead your tax code is changed so you pay less tax equivalent to the amount of tax relief you get.
If you haven't already submitted a claim for this tax year (April 6, 2020 to April 5, 2021), HMRC has an online tool to help you claim it in one go.
What can I claim tax relief on?
THERE are certain things that you can claim tax on under HMRC rules. They include the following:
- Expenses for working from home
- Repairing or replacing small tools needed to do their job (for example, scissors or an electric drill)
- Cleaning, repairing or replacing specialist clothing (for example, a branded uniform or safety boots)
- Business mileage (not commuting)
- Travel and overnight expenses
- Professional fees and subscriptions
Once the application has been approved, the online portal will adjust your tax code for the 2020 to 2021 tax year.
You will then receive the tax relief directly through your salary and will continue to receive the adjustment until April 5, 2021.
It will be included as part of your weekly or monthly payments from your employer, rather than a lump sum, and you'll be able to see the money on your payslips.
Workers can also use the tool to claim the tax relief going back the past four tax years if at any point they've been required to work from home.
In this case you'll receive a lump sum payment instead of a monthly salary boost.
The money saving champion has also warned workers to check their tax codes by April 5 – or you could miss out on thousands of pounds.
The warning comes as a raft of new tax changes were revealed yesterday, affecting pensions, inheritance tax and even holidays.
Meanwhile, thousands of parents will lose some or all of their child benefit payments under a stealth tax.
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