Money Moral Dilemma: Should I claim tax back while working from home due to coronavirus?

MSE_Kelvin

This week's MoneySaver who wants advice asks...

I'm working from home due to coronavirus, and I've read Martin's blog about homeworkers being able to claim £6/week tax back on extra costs. While I'm entitled to do so, since I've not been travelling to work I'm financially better off overall. Obviously, the UK is struggling with this pandemic and spending a lot on benefits to support people who have lost jobs or been furloughed, so should I claim the tax back?

Unfortunately the MSE team can't always answer money moral dilemma questions as contributions are often emailed in or suggested in person. They are intended to be a point of debate and discussed at face value. 

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bradders1983

I thought it was £6 tax relief, not £6 tax back? So a net gain of £1.20 for a basic rate taxpayer.

Hardly worth bothering with.

comeandgo

It's not £6 per week tax back.  Get information straight.  There seems to be thousands of people hanging on every Martin Lewis article and taking it as absolute so correct basic info would help.

Gonna-be-debt-free

That's quite an interesting question.  
Years ago I stopped working as a contractor and switched to doing the same role as an employee, primarily because I was uncomfortable with the minimal taxes paid by contractors.  However, I have always claimed the tax relief for "use of home as office".  So on the one hand I want to pay equitably into the system, but on the other I still want to claim that to which I am entitled.
On balance, I think I would claim it.

Jeremy535897

Don't confuse expenses allowable for tax with those that are not. You are entitled to claim for expenses wholly, exclusively and necessarily incurred in the performance of your duties. Commuting to work does not meet this test. Using your electricity, telephone etc for business does meet the test sometimes, but to avoid having to check a whole load of trivial claims they grant an allowance of £6 a week without proof if you work from home. If you pay tax at 20% it is worth £1,20 a week. After the end of the tax year you use a form P87 to claim. There is no moral dimension. If there was, you would turn down the personal allowance of £12,500 as well. If you want to give the money to a charity of your choice, do so.

HornetSaver

For every £1 I am saving through costs I would otherwise incur, I'm speaking to spend at least as much in ways which I think will have the biggest bang for their buck. So for me personally there's no dilemma, I'm claiming. On a slightly broader point I take the view that there are many fiscal views that were entirely sound eight weeks ago which are not today, and anticipate that the balance of taxation to support is 2021 is going to be radically different to 2019. Therefore, as someone in a safe job, even if I were not seeking to do good with the money I wouldn't personally see it as a dilemma because I see it as inevitable that the Government will (and should) seek a greater contribution from people like me through the tax system in the future.

sliphi

bradders1983 said:

I thought it was £6 tax relief, not £6 tax back? So a net gain of £1.20 for a basic rate taxpayer.

Hardly worth bothering with.

There are two ways to do this:

• Employers can pay you £6/week extra tax-free. Employers can give you an allowance up to this amount and what they give you is free from tax, so you get it all (to give you more, it will need to make special arrangements).
  
  But right now – with many firms struggling – asking may be bad timing, so instead you can...
  
  
• Claim tax relief on £6/wk (worth £1.20/wk at 20% tax, £2.40/wk at higher rate). If your employer won't pay expenses for your extra costs due to necessary working from home, but you have them, then you can ask for the amount to be deducted from your taxable income.
  
  To make the process easy, HMRC says that claims in line with the employers' payment (ie, for £6/wk) will not need to justify that figure – meaning you won't need to keep receipts or prove information.
  
  The impact of a £6/wk claim is the tax savings, that's a gain of £1.20/wk (about £62/year) for basic 20% rate taxpayers, and £2.40/wk (about £124/yr) for higher 40% rate taxpayers.
  
  If you believe you have higher increased costs then you can claim more, but you will need evidence of the cost increases.

Always useful to read the article first, before commenting on it

bradders1983

I choose not to read them as they are mostly garbage. I wasnt wrong though, in theory employers arent going to be throwing money at their employees at the moment so the 1st option isnt going to be happening in the main.

LilElvis

Yeay! £2.70 per week. I expect I will have forgotten by the time it comes to complete husband's 2020/2021 return autumn next year.

[Deleted User]

I'm not going to claim, lol! boss I know you pay me what you've previously paid an 18-year old but do you mind!! just no.  I don't see the conversation going down well.
I imagine I would get told well who's laptop, headset, charger etc did you come home with.  Even looking at a home working job ordinarily to see what an Employer commanded you need it seems a great expense before you'd even start.
Would rather concentrate on keeping 100% of 16k pay (not I don't claim tax credits never had, never done or would) appreciate different strokes for different folks.
And for the fuel being saved, I imagine it will come out in electricity later on.

LilElvis

Deleted User said:

I'm not going to claim, lol! boss I know you pay me what you've previously paid an 18-year old but do you mind!! just no.  I don't see the conversation going down well.
I imagine I would get told well who's laptop, headset, charger etc did you come home with.  Even looking at a home working job ordinarily to see what an Employer commanded you need it seems a great expense before you'd even start.
Would rather concentrate on keeping 100% of 16k pay (not I don't claim tax credits never had, never done or would) appreciate different strokes for different folks.
And for the fuel being saved, I imagine it will come out in electricity later on.

You don't claim it from your employer - you claim it from HMRC. Your employer has nothing to do with it and it doesn't cost them a penny.