Rachel Coates Penrith
23 May 2022
We have noticed recently that social media is being filled by adverts claiming to help you obtain a tax refund on expenses you may have incurred as an employee. The most popular one doing the rounds now is an advert on claiming tax relief for the time spent working from home during the covid pandemic.
As an employee, with your income being taxed under PAYE, there are strict guidelines set by HMRC on the tax relief that can be claimed on any expenses you incur personally that relate to your employment.
The tax relief offered by HMRC was simplified and relaxed during the pandemic for the time that many of us were working from home. You could claim a fixed deduction of £6 per week for the full tax year if you spent any time working from home in the tax year regardless of how many weeks you actually spent working from home.
The simplified method of claiming can potentially apply to both tax years 2020/21 and 2021/22 and you receive tax relief on this at the rate at which you pay tax. For a basic rate taxpayer this equates to 20% basic rate tax relief on the £6 per week, so £1.20 per week in tax relief. For the full tax year this would save £62.40 in income tax for a basic rate taxpayer and £124.80 in tax for a higher rate taxpayer paying tax at 40%. Therefore, please be aware that adverts on social media purporting to help you claim a £312 tax rebate are clearly misleading as this is not the actual tax refund you would be able to get your hands on! Unfortunately, our concern doesn’t stop there.
We now know that some of these companies who offer such services to “help you” claim the tax relief back, are doing so and then going on to make fraudulent claims for other tax reliefs in your name and using your personal details that you would have provided when responding to their advert. The money for such fraudulent claims is paid into their bank accounts but using your personal details! We know from HMRC that in some cases these fraudulent claims amount to thousands of pounds, that the individual has absolutely no idea are being made in their name. Our message therefore is, please contact a reputable accountancy firm to help you get the best tax advice and assist with these claims and be very wary of such adverts that are appearing across social media platforms.
You might be able to claim tax relief on other expenses you incur as an employee, in addition to the working from home tax relief. This might apply to things that you must buy for your job, you have used your own money to buy and you only use these things for your work. Tax relief can also be claimed on other costs incurred such as laundry costs for cleaning your uniform if you wear one and professional membership fees or annual subscriptions to approved professional bodies. It is only possible to make a claim for the last 4 years, so if you think you might be able to claim a tax refund, the sooner you do it, the better.
HMRC’s website has lots of information on the things you can claim and how to go about making the claim for tax relief. You can make the claim yourself using your personal tax account https://www.gov.uk/personal-tax-account. Please do be very careful with social media adverts and providing your personal details.
If you have any questions or concerns regarding tax claims, please speak to your usual Dodd & Co contact.