Individuals who work from home urged to ‘backdate’ up | U.Ok.Finance Information
Individuals who work from home might get as a lot as £702 a 12 months back from HMRC in the event that they backdate a tax allowance they’re owed for the previous 4 years in addition to this 12 months.
The self-assessment tax return deadline from HMRC has handed for the 2023-2024 tax 12 months should you usually file a tax return, however don’t fret, as you may nonetheless make a declare immediately with HMRC and backdate the declare for one more 4 financial years too. The allowance helps meet the price of bills corresponding to electrical energy, heating, or broadband incurred by working from home. In case you did not submit a self-assessment tax return earlier than January 31 you may nonetheless declare the money back immediately from HMRC by way of the gov.uk web site, right here.
However the catch is that you simply’re solely eligible if it’s important to work from home, corresponding to in case your employer makes you’re employed from home otherwise you dwell too removed from the workplace to have the ability to commute in.
In case you select to work from home, you received’t be eligible for the tax reduction. So, you wouldn’t be eligible for the money if in case you have a everlasting working-from-home contract.
The taxman will allow you to declare both the precise quantity you spent on cellphone calls, gasoline, and electrical energy for work or a flat £6 a week price, which might equal £312 throughout the 12 months – you then get 20% of that back as tax reduction if you’re a fundamental price taxpayer, or £62.40 per 12 months.
In case you pay tax on the 20% tax price, that makes £62.40 of tax saved for every £312 you declare per 12 months. That £62.40 of tax then turns into £312 in complete saved throughout 5 years should you declare for this 12 months and 4 more backdated years.
In case you pay tax at 40%, ie you earn over £50,270, the reduction relies on the 40% bracket. Which means you save £124.80 per 12 months, or £624 throughout 5 years.
Taxed at 45%, ie you earn over £125,000, it turns into £140.40. Throughout 5 years, that is £702.
The Authorities explains: “You may be able to claim tax relief for additional household costs if you have to work at home for all or part of the week.
“You can claim tax relief if you have to work from home, for example, because your job requires you to live far away from your office; your employer does not have an office.
“You cannot claim tax relief if you choose to work from home. This includes if your employment contract lets you work from home some or all of the time; your employer has an office, but you cannot go there sometimes because it’s full.”
“You can either claim tax relief on: £6 a week or the exact amount you’ve spent.
“In case you pay the 20% fundamental price of tax and declare tax reduction on £6 a week, you’ll get £1.20 per week in tax reduction (20% of £6).
“Higher rate taxpayers would receive £2.40 a week (40% of £6 a week). Over the course of the year, this could mean customers can reduce the tax they pay by £62.40 or £124.80 respectively.”
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