Work From Home Tax Loophole To Be Closed
The recent tax relief scheme for people working from home during the pandemic has been a huge help, saving the public substantial amounts from household living expenses such as electricity, gas and the internet.
But, according to a recent article in The Telegraph, this scheme is set to close as it had cost the Treasury nearly £500 million throughout the pandemic.
The article goes on to say, “HM Revenue and Customs is urgently reviewing a rule that allows anyone who works even a single day from home to claim a yearly sum of up to £125 in tax relief”. The rules had been relaxed at the start of the epidemic to help those millions of people who were told to refrain from entering the workplace and to stay at home.
“The updated scheme was originally intended as a temporary measure to end in April 2021, but was then extended for 12 months. Claims can also be backdated, meaning that anyone eligible who worked from home because of Covid but never made a claim is entitled to a two-year payout of up to £250”, states The Telegraph.
The same article also reports that bosses of companies that rely on trade from office workers described the tax break as a “recipe for endless home working”. Some government MPs “questioned the wisdom of rewarding workers for staying at home, when many have already saved hundreds of pounds a month on train fare and other costs”.
The demand for the tax break was being driven by consumer experts such as Martin Lewis (MoneySavingExpert) and the GOV.UK site on social media only days ago. According to Mel Stride, chairman of the Commons Treasury Committee and a former minister;
“Clearly this is something the committee will want to look at closely and monitor to make sure that any proposed changes are sensible in terms of being fair to taxpayers but equally supporting the public finances.”
HMRC tax relief remains there to support people working from home with the additional household costs that working from home involves.
The Telegraph ends its piece with a final quote from a Treasury spokesman; “there are no plans to reform this deduction but we keep all taxes under review and closely monitor their value for money.”