The working from home tax relief where employees can claim up to £125 may be scrapped after claims soar.
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The working from home tax relief to allow you to claim up to £125 per year per employee has been running since 2003.
Many people weren’t aware of it as it’s not something most people would need to use.
However, with more people forced to take Zoom calls in their PJs, from April 2021 to June 2021, some 800,000 extra people had taken advantage of the scheme.
When the pandemic started, the government even issued a press release to urge more people to sign up.
And, even a few days ago, they were still tweeting to suggest people save money on their tax.
But, as more and more people found out they could save money on their taxes, the cost to the Treasury has gone up.
According to The Telegraph, the cost to the Treasury of the working from home tax relief during the two years of the pandemic cost nearly £500 million.
Before the pandemic, the same relief cost £2 million a year.
And, it appears, they no longer want to foot the bill for anyone working at home so are looking to scrap the tax relief.
Working from home tax relief
The whole idea is that working from home costs a lot more on your household bills.
The tax loophole allows people who work at least one day a week from their home to help with the additional spending on things like electricity, gas, water and internet bills.
As more people were forced to work from home during the pandemic, the scheme was relaxed and millions were told to claim, and the amount you could claim was raised from £4 to £6 a week.
Instead of having to prove you worked from home regularly, everyone could claim for an entire year, even if they worked from home for just one day.
You’re also able to backdate the claim so, if you are eligible, you can get two years of tax relief.
If you’ve not done so yet, the portal to claim is still open and it takes around 1 minute (not long at all) to put in a claim.
While there is no mandate for employees to work from home, there are many who are still asked to not come into the office.
Figures from the ONS showed that 25% of people reported having worked from home in the week running up to 16th January 2022.
It’s unclear at this time if they report to the Chancellor will suggest scrapping the tax relief for everyone, or moving the rules back to what they were before the pandemic.
With the general cost of living increasing, it’s another hit to the household budget that some families don’t need right now.
If you’ve enjoyed being home and might need to return to your place of work – but don’t want to – why not look into genuine work from home jobs you could do instead.
You can still save while being at home regularly. Take a look at how to save money on energy bills.
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