Working from home claim HELP -- do I qualify to use microservice or not?

Lily78_2

Hello, 
I have a question regarding the 'working from home' claim tax relief as I cannot find the answer if: 

1. I qualify and can use the micro-service
2. I somewhat qualify but should not use the micro-service and wait as I may need to fill a self assessment tax return for tax year 2020-2021 (i.e. one for which deadline I presume will be Jan 2022??); 
3. I do not qualify 

Let me explain my situation.

• I have worked part-time as an employee (paid through PAYE) for a company till 31 July 2020. I was working for them since 2019 and so was under contract when lockdown#1 happened on 23 March 2020 (we had actually been asked to work from home since earlier in March 2020, when the situation started to degrade). My contract came to an end on 31 July 2020. 
• I haven't worked or received income since. 
• I am now going to start working for the same company from 25 January 2021 - another part-time contract, for a different role, and employees are still working from home.

• To complicate things, I have also started working for a company as freelance - a 3-month project from 4 January till 31 March 2021. This is as 'self-employed' as I will need to invoice them for payment for my services...first invoice will be end of January 2021 (I also need to decide on my status for this, ie 'sole trader' or 'ltd company'...). 
• I believe because of this, I may have to fill the tax return self-assessment for 2020-2021... and so it might affect me claiming the 'working from home' tax relief using microservice 

If anybody out there is able to help me understand this, I would be very grateful. 
Many thanks!

Jeremy535897

Lily78_2 said:

Hello, 
I have a question regarding the 'working from home' claim tax relief as I cannot find the answer if: 

1. I qualify and can use the micro-service
2. I somewhat qualify but should not use the micro-service and wait as I may need to fill a self assessment tax return for tax year 2020-2021 (i.e. one for which deadline I presume will be Jan 2022??); 
3. I do not qualify 

Let me explain my situation.

• I have worked part-time as an employee (paid through PAYE) for a company till 31 July 2020. I was working for them since 2019 and so was under contract when lockdown#1 happened on 23 March 2020 (we had actually been asked to work from home since earlier in March 2020, when the situation started to degrade). My contract came to an end on 31 July 2020. 
• I haven't worked or received income since. 
• I am now going to start working for the same company from 25 January 2021 - another part-time contract, for a different role, and employees are still working from home.

• To complicate things, I have also started working for a company as freelance - a 3-month project from 4 January till 31 March 2021. This is as 'self-employed' as I will need to invoice them for payment for my services...first invoice will be end of January 2021 (I also need to decide on my status for this, ie 'sole trader' or 'ltd company'...). 
• I believe because of this, I may have to fill the tax return self-assessment for 2020-2021... and so it might affect me claiming the 'working from home' tax relief using microservice 

If anybody out there is able to help me understand this, I would be very grateful. 
Many thanks!

You will qualify for the working from home allowance for employees, so long as your employer required you to work from home (rather than you choosing to). If so, you can claim the £6 a week for the full year, even though you were not employed throughout 2020/21 (assuming you got no reimbursement from your employer). You should not use the microservice if you need to register as self employed (deadline 5 October 2021) for 2020/21, as you will need to complete a self assessment return. However, if the freelance is only going to be a one off, you may be able to treat it as casual earnings. See https://www.gov.uk/government/publications/other-taxable-income-hs325-self-assessment-helpsheet/other-taxable-income-2020-hs325
Your mention of whether to form a limited company indicates that you are probably doing something more substantial than casual earnings. It would be very rare that a one off freelance assignment would merit using a limited company. In addition, you have already contracted with your customer as an individual, not on behalf of a non-existent company. Depending on the nature of the work, it may come within the remit of IR35 (off-payroll working) from 6 April 2021.