Home workers can claim tax relief on office supplies - here’s how to apply
If you are required to work remotely during the coronavirus lockdown, you may be able to claim tax relief for office equipment under HMRC’s rules.
Office desks, chairs and stationary such as printer ink, are among the essential work items home workers can claim money back on.
The entitlement is not new - under HMRC's rules, workers can claim tax relief if their employer has asked them to work from home.
Millions of workers across the UK could now be eligible to claim as they work from home while lockdown continues.
What items can I get tax relief on?
You can claim for tax relief on any necessary purchases made to help you work from home.
This includes technology, stationary, and printer ink, among other items.
You can also claim tax relief on the cost of furnishing your home office with items such as a desk, a bookcase and an office chair.
What items are not covered for tax relief?
HMRC will reject claims for items you use in your private life, as well as for work, such as clothing, broadband or rent.
How can I claim?
To claim, you will need to fill in a P87 form, which can be downloaded on the government website and sent to HMRC in the following ways:
- Online through a Government Gateway account.
- By post, this application method must be used if you are claiming on behalf of someone else or for tax relief on more than five different jobs.
You don't have to submit receipts with the P87 form, however you should keep them safe in case HMRC wants to check them at a later date.
Explaining the scheme on the ITV Money Show, consumer expert Martin Lewis said:"You'll be asked for your employer's name and PAYE reference (which you can find on your payslip or P60), and your job title.
"For postal P87s, you'll also need your national insurance number."
If you are applying with the online form, Lewis said the easiest way to claim is to list £6 for each week spent at home in the "amount you have paid" section, while listing the "amount paid to you by your employer" as £0 - so long as your employer hasn't increased your wages to cover for such expenses.
On the other hand, if you're using the postal form to claim, you will need to manually enter a "Using your home as an office" expense in the "Other expenses" section.
Martin added that "once you've submitted the claim, if you do it online you may hear back within a couple of weeks. However, obviously if HMRC is under pressure it may take longer”.
Can self-employed workers claim?
Those who are self-employed, should claim for working expenses as they normally would, through a self-assessment tax return.
How much tax relief will I get?
If your claim is successful, HMRC will pay you by cheque or simply adjust your tax code, so you will pay less income tax.
The amount of tax relief for the office equipment you have bought, will be the same as the level of income tax rate that you are on.
For example, if a basic-rate taxpayer who pays 20% income tax, claims £1,000 of allowable expenses for an office chair and desk, they could receive £200 - which is 20% of their claim - by cheque, or this amount will be taken off their annual income tax.
Martin Lewis explained: "Your employer is allowed to pay you £6 a month tax free if forced to work from home."
However, if you need to claim for a bigger amount, you will also have to submit a tax return and you will need evidence of the cost increases.
"To make the process easy, HMRC says that claims in line with the employers' payment (ie, for £6 a week) will not need to justify that figure – meaning you won't need to keep receipts or prove information."
"The impact of a £6 a week claim is the tax savings, that's a gain of £1.20 a week (about £62 a year) for basic 20% rate taxpayers, and £2.40 a week (about £124 a year) for higher 40% rate taxpayers."
HMRC ‘will be inundated with claims’
Nimesh Shah, a partner at the tax firm Blick Rothenberg told The Times: “Because a large number of people have been forced to work from home during the lockdown, HMRC will be inundated with claims for home working expenses.”
A spokesperson at HMRC told The Times that HMRC did not have the exact figures on the number of P87 claims it has been sent, however they confirmed that the figure had increased significantly.
This surge in claims comes after John Lewis revealed their online home office sales had increased by 123 per cent since the week beginning March 16.