Working from home in 2020/21 the Corona year

In October 2020, HMRC confirmed that for 2020/21, as a special year because of the Coronavirus pandemic and with so many people working so much from home, an employee can claim the full £6 per week working from home fixed-rate relief for the whole year EVEN if they only worked from home for some weeks or part-time.

That is relief of £312, which is worth a tax saving of £62 a year for a basic rate taxpayer and £124 a year for a higher rate taxpayer.

Normally, an employee can only claim the £6/week relief for weeks they have worked at home. It seems that the administrative headaches of stopping and starting the relief have resulted in HMRC effectively saying to employees “go on have relief for the whole year, just please stop calling us to ask about it”.

The only qualification is that you were required to work from home at some point in the tax year 2020/21. In future years, the rules will go back to claiming only for the recorded weeks worked at home.

How to claim the relief:

  • For anyone who does a self-assessment tax return, the claim should be made in the tax return. This is the simplest method.
  • Contractors who submit expenses can put the claim through expenses, as the employer can pay this tax-free to the employee. If a contractor has already claimed for some weeks previously, they can top up the balance to the full £312 relief on their next claim.
  • Other employees who want to claim need to use a new dedicated working-from-home microservice to adjust their tax code. This will need to be done through your own Government Gateway ID. If you don’t have one, you can create one as part of the process.

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