From April 6th, 2020, employers have been able to pay their employees up to £6 a week tax-free to cover additional costs if they have been made to work from home to prevent the virus from spreading. Those that haven’t received this extra payment from their employers can apply to receive the tax relief from HMRC. This online portal was launched on October 1st, 2020 and in the first ten days, saw almost 55,000 claims submitted. The portal provides a hassle-free way to claim the relief without needing to provide receipts or to make complicated calculations.
Once the application has been approved, the online portal will adjust the employee’s tax code for the 2020 to 2021 tax year. The employee will receive the tax relief for working from home directly through their salary and will continue to do so until March 2021.
Not everyone receives the full £6 per week though – it depends on how much tax the employee usually pays. For example, if an employee pays the basic 20% tax rate and claims tax relief on £6 a week, they will receive £1.20 a week in tax relief (20% of £6 a week). Those on a higher tax rate such as 40% would therefore receive double the amount i.e., £2.40.