EMPLOYEES can get a tax relief if they have to work from home due to the coronavirus lockdown to help them cover the costs of rising energy bills.
In his latest blog post, Martin Lewis reveals that home-workers can claim on a rate of £6 a week in tax to help cover extra costs, such as heating and electricity.
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The rules aren't new and only apply to staff whose employers require them not to come into the office, not those who simply choose to.
Millions of workers have been ordered to stay at home where possible as companies follow a Government ban on all non-essential travel.
There are a number of schemes open to those struggling to pay their energy bills and ways to cut down on your usage to reduce costs.
On top of these measures, employees can apply for a tax relief.
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Currently they are entitled to claim back on a rate of £4 a week in tax but this figure is rising to £6 a week from April 6.
There are two ways you can claim the money back, according to the money guru.
One option is for your employer to pay you the extra costs on a rate of £6, tax-free on top of your salary.
But this might not be possible during a time when many employers are struggling to stay afloat during the lockdown.
The second option is to ask HMRC for the relief to be deducted from your taxable income.
You won't need to supply any receipts of bigger bills if the amount you're claiming is on a rate of £6 a week.
The exact amount that you will get back depends on what rate tax payer you are.
So, a basic rate tax payer in the 20 per cent tax band can claim back £1.20 a week which works out as about £62 a year.
For higher tax payers who pay a 40 per cent rate, the saving is worth £2.40 a week or £124 a year.
What to do if you can't pay your bills
FALLING behind on your energy bills can be extremely stressful.
If you’re struggling to pay what you owe, contact your supplier as soon as possible.
Your provider has to help you come up with a solution, and you should be able to negotiate a deal that works for you both.
One option is to agree a payment plan where you pay off your debts in affordable installments.
You may be able to pay off your debts directly from your benefits through the Fuel Direct Scheme.
A fixed amount will automatically be taken to cover what you owe plus your usage.
To be eligible, you must be getting one of the following benefits:
- Income-based jobseeker’s allowance
- Income support
- income-related employment and support allowance
- Pension credit
- Universal Credit (but only if you’re not working)
If you cannot come to an agreement with your supplier, they may try to force you to get a prepayment meter installed.
In very rare cases, where you refuse to negotiate, your supplier might threaten you with disconnection.
If your costs are higher you can claim more but it's a bit more complicated as you'll need to provide evidence of your increased costs, such as paid bills.
You can claim the relief on your self-assessment form or by filling out an online P87 form.
You will need to supply a few details, such as your employer's name and PAYE reference, which can be found on your payslip, and your job title.
Make sure that you fill in the "Using your home as an office" section, putting the total amount that you're claiming for in the "Amount paid by you" box.
Put zero in the "Amount paid to you by your employer" box if they haven't paid you the allowance or reimbursed the tax-free amount.
If your employer is able to pay you the extra costs, swap the figures around fo each box.
If you can't fill out the form online, you can ask for a postal form.
You will need to include your national insurance number on these, and add a "using your home as an office" section manually in the "other expenses" box.
Martin points out that you can claim the expenses retrospectively.
He said: "So, if you're only at home due to coronavirus, it's best to wait until you're back at work (or a few months anyway) then make the whole claim at once.
"Your tax code will likely be adjusted so you pay less tax over the year, as opposed to you getting a direct refund."
Usually it takes around two weeks for HMRC to get back to you but as the department is in high demand at the moment, you should expect a delay.
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