The enhanced tax relief available for employees to claim if they work from home is under review by HMRC.
Originally introduced in 2003 to support those who permanently worked from home, the tax relief was designed to help with internet costs and utility bills, but work from home status had to be proven in order to claim.
When we were all ordered to work from home at the start of the pandemic, the rules were eased, so that claims could be made without having to prove that they regularly worked from home. The relief was also extended so employees could claim even if they only worked for one day during the tax year, yet could claim the whole annual sum. At the same time, the tax relief was increased from £4 to £6 per week.
The tax relief has been worth £62.40 a year for basic rate taxpayers and £124.80 for higher rate taxpayers. The enhanced relief was extended in April 2021 for another 12 months.
However, with reports showing that the tax relief has cost the government around £348m already, it seems that its time – at least in this enhanced format – will be soon coming to an end.
Next steps
If you have any questions about tax relief or would like further advice, please contact us and our tax team will be happy to help you.
Inspire is an award-winning business and tax advisory firm, here to help business owners on their journey through both challenging and successful times. www.inspireaccountants.co.uk.