Find out if you’re one of the thousands missing out on a tax rebate – P87 Form Working From Home – worth up to £300 per year.
COVID19 has changed how businesses operate and has forced many to work from home.
If you’ve been forced to work from home by your employer, you are likely legible to claim back some business expenses using the P87 form. Please note it’s very unlikely HMRC will accept any rebates if working at home was deemed optional by your employer. Hopefully that’s not you, so read on.
✓ Able to use Form P87 if:
- Employed (in the UK) and incurred expenses as part of employment duties that haven’t been reimbursed by the employer
- Allowable expenses for the tax year are less than £2,500
X Cannot use the HMRC Form P87 if:
- Self-employed or an independent contractor
- Already filed a self-assessment tax return
- Expenses are more than £2,500
What home office expenses can be claimed?
The employee can only use Form P87 to claim work specific expenses. e.g:
- heating and lighting for the work area of your home
- business phone calls and printing
- broadband connection
It is worth noting that eligible taxpayers claim any relief based on the rate at which they pay tax. For example, if an employee pays 20% (basic rate) of tax and claims tax relief on £6 a week, they would receive £1.20 a week in tax relief (20% of £6 a week) towards the cost of their household bills.
Finally, it’s worth noting that the employee can only claim tax relief if their employer hasn’t reimbursed expenses. However, if they’ve received a partial reimbursement, e.g: received 20p per mile from the company rather than HMRC’s approved mileage rate of 45p per mile—they’re able to claim tax relief on the difference.
What home office expenses cannot be claimed?
The following cannot be claimed;
- council tax
How much can be claimed?
There are 2 ways to claim:
- The employee is able to claim tax relief on £6 a week from 6 April 2020 and will not need to keep evidence of these costs.
- For specific amounts incurred above the weekly amount – receipts or bills will be required
From 6 April 2020, employers have been able to pay employees up to £6 a week tax-free to cover additional costs if they have had to work from home. Employees who have not received the working from home expenses payment direct from their employer can apply to receive the tax relief from HMRC.Gov – https://www.gov.uk/government/news/54800-customers-claim-tax-relief-for-working-from-home
Documents needed to complete Form 87
Form 87 can be completed online or printing and posting. Similarly, the following documents are required:
- National Insurance number
- In addition, the details of all allowable expenses
- Your employer’s PAYE reference as well as employee number (these will be on payslip)
- List any employer contributions towards your expenses
- Any relevant receipts
For more information on P87 form working from home, see the HMRC guidance on how to calculate the portion of tax relief you’re entitled to.
The application – Online
In this paragraph, find out how to complete and submit the Tax Relief Working from home form. To apply online, simply login to the Gov site by entering your Government Gateway UserID and password. Fill in the form and hit submit. Simple as that.
It’s worth noting that it’s always good practice to keep a copy of any completed forms.
In conclusion, please be advised that HMRC have noticed a spike in applications since lockdown, so the process may take longer than usual!