Working from home: HMRC’s £125 tax break now harder to claim

theguardian.com:

A popular tax break for working from home that gave many people’s finances a small boost during the pandemic has become harder to claim, and most employees will no longer be eligible.

With millions of people back in the office for at least part of the week, experts say you can now claim tax relief for working from home only if you meet strict conditions.

Some commentators are urging employees to check their PAYE tax codes, because if HM Revenue and Customs has included the relief when you are no longer eligible you could potentially end up with a surprise tax bill.

But one bit of good news is that if you were required to work from home but did not get round to claiming, it is not too late. You can still claim for previous years.

Tax relief linked to working from home predates the pandemic – it was introduced almost 20 years ago. However, in 2020 the government relaxed the rules, which meant suddenly millions of people who were forced to work from home during lockdowns were able to claim tax relief worth up to £125 a year.

In autumn 2020, HMRC launched an online portal for employees to make a claim without having to provide receipts or do complicated calculations. And, to make things even easier, eligible workers could claim a full year’s entitlement even if they had to work from home for only one day during the tax year.

Perhaps unsurprisingly, it has been a popular tax break. Millions of people have successfully claimed it, sending the bill for the relief soaring from about £2m a year before the Covid crisis to nearly £500m over the two years of the pandemic, according to reports.Some people were probably expecting they could just claim again.

The tax relief was offered to workers provided they were told by their employer,