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17th June 2020

How To Make An Expense Claim

Worked From Home? You Could Be Entitled to Make An Expense Claim

Worked from home lately? If you incurred costs you can claim them back against your tax…

If you’ve worked at home because of coronavirus you might have incurred extra costs for which you can claim a tax deduction. How do you make an expense claim and what happens after the tax year ends?

Where employees or directors work from home because their job requires them to, they are entitled to claim a tax deduction for household expenses incurred as a result (unless their employer reimburses them without deducting tax from the payment).

Employers can do this if they are satisfied that the employee would be entitled to a tax deduction if they didn’t reimburse them. HMRC statistics show many employees aren’t claim the tax deductions they are entitled to.

If you’re working or have worked at home because of coronavirus HMRC accepts that this is a requirement of your job and therefore you are entitled to a tax deduction for household expenses not covered by reimbursements made to you by your employer.

While HMRC has reported a rise in claims for tax relief for homeworking expenses, it’s relatively modest compared with the number of people who are working at home because of lockdown. One likely reason for this is that many employees and directors don’t know what their expenses are before claiming. 

There are different ways you can make a claim for expenses:

  • Calling the tax office on 0300 200 3300
  • Using your online Personal Tax Account
  • Completing form P87 and sending it to HMRC 
  • Writing a letter to HMRC setting out your expenses

Having made a claim and received an amended tax code, that isn’t necessarily the end of the matter. If you estimate of expenses turns out to be too low or high you’ll pay too much or too little tax. In which case you’ll need to take further action depending on your circumstances.

If you are required to complete a self assessment tax return you must recalculate your figures and include the actual amount of homeworking expenses in the employment section of your return.

If you are not required to complete a self assessment tax return and you estimate of homeworking expenses was out by more than a little you should write to HMRC giving the actual figure for the year by 5 October following the end of the tax year. For the current tax year that’s 5 October 2021. It’s then up to HMRC to issue a simplified or information tax assessment or ask you to complete a tax return.

We can help you make an expense claim if you are stuck. Get in touch today.

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