finance

Millions missing out on £125 tax refund from HMRC – how to get it


MILLIONS of Brits could get a tax refund because of the coronavirus pandemic.

Working from home through Covid has added more to household expenses like heating and internet bills.

There's a handy online tool from HMRC to make claiming the cash easier than ever

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There’s a handy online tool from HMRC to make claiming the cash easier than everCredit: Alamy

And ahead of a rise in energy costs expected in just a few weeks time and a tax hike next year, claiming tax back could help you cover these costs.

Anyone who has worked from home for even one day this year can get the money back and nearly 800,000 workers have already claimed.

You can get £125 per year if you have been told to work from home by your employer.

The working from home tax relief became more widespread last year as many more people were forced out of their normal job location because of the pandemic.

It’s thought that up to three million people are eligible for the tax back and according to the most recent figures it means millions are still missing out on the money.

Claims can be made for previous years too, so anyone who has never claimed and was eligible in the past four years could be owed up to £500 in total.

Here we explain how it works and how to make a claim for the cash.

It comes as fears grow over a winter surge in Covid cases that could see the return of compulsory face coverings and work from home rules.

How much is working from home tax relief?

You can claim tax relief on £6 per week for the current tax year.

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If you are a basic rate tax payer, the relief is worth 20%, which means that you’ll get £1.20 per week.

Over the course of the year, this adds up to £62.40, for anyone earning between £12,500 and £50,000.

If you pay higher rate tax your relief will be worth 40% or £2.40 per week.

This adds up to £124.80 for the year and is available to anyone who earns more than £50,000 per year.

You can claim for last year too (the tax year runs from April to April) if the same applies – your employer required you to work from home, even for just a single day.

HMRC will, in fact, accept backdated claims for up to four years

You won’t be able to claim the tax back if your employer is covering your working from home expenses already.

You also can’t claim if you’re self-employed – since you work for yourself you can claim expenses on your tax return.

How can I claim working from home tax relief?

HMRC has a handy online tool to help you submit a claim for this year and last year.

You’ll need a Government Gateway user ID and password, which you can create online in less than 10 minutes.

Make sure you have your National Insurance number and a recent payslip, P60, or a valid UK passport to hand.

Once the application has been approved, your tax code for the 2021 to 2022 tax year will be adjusted automatically.

You will then see the tax relief directly through your salary, and will continue to receive the adjustment until April 5, 2022.

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You won’t get a one off payment when claiming for this year, instead it will be included as part of your weekly or monthly payments from your employer.

But for claims for last year, you’ll get he money as a lump sum through your salary.

Taxpayers can claim money back in many ways and it could add up to thousands of pounds – here’s how.

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