Nearly 800,000 employees, working from home, claim tax relief

The employment landscape has seen some of the devastating repercussions of the coronavirus pandemic with a large section of people staying unemployed for months, largely because of the massive lay-offs by the corporations and business closures either to oblige the government guidelines or due to internal failure in maintaining the going concern principle.

The government of the United Kingdom has aptly supported the employees that faced cyclical unemployment due to the heightened Covid activity in the nation, as a result of which, the Downing Street administration has to impose months-long national lockdowns for three times.

The HM Revenue and Customs (HMRC) has extended the benefit of tax concessions to a majority of employees. The employees who have returned to workplaces, worked from home during the pandemic-induced restrictions, following the phased easements across the country are eligible to claim tax relief on household expenses for the present assessment year.

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According to the data revealed by the HMRC, approximately 800,000 employees have already claimed the benefits of tax relief on household related costs since April. Under the tax relief introduced by the HMRC, the entitled employees can claim a full-year benefit of up to GBP125 in a calendar year.

The workers can do so if they are told to work from home from their respective employers, irrespective of the duration of work from home, it can be for a single day in the tax year.

The employees, eligible for the tax reliefs, who have not received the expenses payment associated with household costs directly from their employers can apply for the same at the HMRC portal.

The quantum of tax reliefs is calculated on the rate at which the tax is paid by the workers. Over the 12-month stretch, the eligible taxpayers can reduce their tax obligations by GBP62.40 or GBP124.80, respectively.

Interestingly, the HMRC is willing to accept the backdate claims for up to four years in order to provide the benefit of tax relief to the employees who worked from home between 2020 and 2021 tax year but didn’t claim for the tax benefits. All such cases of backdated claims are supposed to receive a lump sum payment according to the respective tax breakups.

The workers who are yet to join the office or have already started working in a workplace setup are eligible for claiming the tax reliefs.

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The total number of claims made in the 2021-22 tax year stands at 794,819, at the end of 27 June 2021. This includes the total number of claimants who have applied via the online portal of HMRC. All the eligible employees can directly apply for the claims through HMRC’s online portal. The tax code will be automatically adjusted following the successful approval of the application.