Employees who claimed home office tax relief during the pandemic could end up paying more tax this year

Workers who have been boasting “Home Business Relief” during the Covid 19 Lockdown really should be urgently reviewing their tax codes to explain irrespective of whether HMRC have involved the reduction within their detect of coding.

Robert Salter, a customer tax director with major tax and advisory firm Blick Rothenberg explained: Staff members should be reviewing their PAYE tax codes to make clear no matter whether HMRC have included the home business relief inside of the discover of coding.

“If this is the situation, except they are nevertheless eligible for the relief in 2022/23 – they should really contact HMRC to get the see of coding corrected. Or else, they will have further tax to pay out at the conclusion of the tax 12 months.”

Robert added: “The Govt comfortable the guidelines relating to household business working and the connected eligibility for declaring house office aid for the 2020/21, 2021/22 and 2022/23 British isles tax a long time. In influence, because of to Covid, individuals can declare the £6 for each week tax reduction in complete for just about every of these tax a long time, wherever they simply were being needed to work from home for a restricted period of time in every single of these tax decades. For example, if your employer essential you to perform from property for the duration of distinct lockdowns for a few weeks, you had been entitled to declare tax aid of £312 for the yr (52 months x £6 for each 7 days), unless your employer lined your house office environment expenditures.”

Robert reported: “However, this was a short term relaxation of the policies on the aspect of HMRC. As these kinds of, the house office reduction is only readily available from 6th April 2022 onwards, if
your employer especially involves you to do the job from a house office environment – e.g., to prevent the unfold of Covid or mainly because your job has been ‘relocated’ and now is contractually regarded 100% as a home business function.”

Robert included: “If, for instance, your employer only now lets team to operating flexibly – i.e., being in the business or working from residence as it fits each and every particular person, the house office reduction ceases to be offered for the 2022/23 tax 12 months and no tax relief is accessible for the fees which one particular incurs from working from property in this problem.”