Employees reminded not to forget working from home and other tax relief

Date posted: 7th Jan 2021

As the Tax Return deadline approaches, it may be useful to consider whether employees are still missing out on tax refunds and reliefs. These could be particularly useful during the ongoing coronavirus pandemic, advises Lee Watson, tax director at Clive Owen LLP, which has offices in Darlington, Durham, and York.

Lee Watson explains: “We come across many new clients who are missing out on tax reliefs for costs which they incur, such as professional fees and subscriptions, costs of acquiring and cleaning certain necessary clothing, mileage allowances, if paid by their employers at less than HMRC rates, and so forth.

“In addition, for higher rate taxpayers earning above £50,000 there may be some tax to claim back in relation to personal pension contributions such as auto enrolment and charitable donations.

“Also, for married couples, there could be the opportunity to claim the marriage allowance, where one spouse does not utilise their full personal allowance and the higher earning spouse is not a higher rate taxpayer.”

In addition, with many workplaces closed, thousands of people across the region are working from home potentially unaware that they can claim some tax relief on the costs of light and heat incurred due to working from home.

Lee Watson explains: “A lot of people, myself included, are currently following government advice and working from home.

“If you must work from home, rather than choose to work from home, there are a number of ways you can receive a financial contribution to cover the extra expenses incurred.”

  • Your employer can pay you a maximum of £6 a week to cover light, heat, telephone bills etc. with no tax or national insurance payable – however, there is no obligation for the employer to pay this.
  • A claim for tax relief on the amount £6 a week can be made, by the employee, if the employer does not pay these costs.
  • If actual costs are much higher than £6 a week, for example due to making numerous calls from a landline, claims can be made for the actual expenses, but these would need to be detailed and itemised.

“It is definitely worth individuals and businesses taking advice, to ensure that no tax breaks are missed. Any claims can potentially be backdated to the tax year starting on 6 April 2016 so there may be tax refunds for the last four complete tax years to consider.”

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