People working from home can be eligible to claim work expenses, but accepting bad advice could mean they have to pay HMRC instead, with the tax office urging people to recognise the warning signs
HMRC has issued a warning to home workers as online advertisements and companies are offering to submit claims to the tax office on their behalf. These rogue tax advisers pocket commission from any refunds received while also potentially leaving employees facing liability for fraudulent claims.
Writing on X, the department stated: “Don’t get caught out by ads promising quick tax refunds for working from home. Always check if you’re eligible before making a claim directly with HMRC.”
The tax office also encouraged people to recognise warning signs of poor advice as part of its Don’t Get Caught Out campaign. It highlighted one key red flag: “If someone promises easy money and it sounds too good to be true, it probably is. Even if you choose to use a tax refund company or agent, make sure your claims are valid, as you’ll have to repay any incorrect claims to HMRC later. Making incorrect claims may also result in additional action by HMRC.”
HMRC highlighted three major red flags of bad tax advisors:
- Asking you to sign a blank tax return for the agent to fill in
- Asking for your Government Gateway ID
- Claiming to be endorsed by HMRC
Legitimate advisers should request receipts and permit you to examine and approve tax returns before submission. Workers are urged to complete three crucial steps before engaging any tax refund firm or agent to handle their rebates.
First, examine feedback from previous clients and verify whether the professional holds accreditation with recognised bodies such as the Institute of Chartered Accountants in England and Wales or the Chartered Institute of Taxation. Should the agent meet these criteria, ensure you thoroughly examine any fine print within disclaimers requiring your signature.
HMRC cautioned: “When you sign an agreement with an agent, you might be asking them to be your legal representative for all your tax affairs – even long after the claim has been made. Make sure you fully understand any fees the agent will charge. Remember, you are still responsible for any claims made on your behalf, even if you choose to use a tax refund company or tax agent.”
Employees entitled to tax relief and refunds can submit their own claims for work expenses directly through HMRC at no cost. In most circumstances, you’ll need to supply evidence to support your claim. More information can be found on Gov.uk website.
People working from home can only claim tax relief if they’re required to work from home without choice. For instance, they reside too far from the workplace to travel daily or their employer lacks office premises.
This means you’re unlikely to qualify if your employment contract allows you to opt for home working partially or entirely, or your employer has an office that’s at capacity, preventing you from working there. Those eligible to claim tax relief for working from home can only claim for items directly related to their work, such as business phone calls or gas and electricity for their workspace at home. Claims cannot be made for items used outside of work hours, like rent or broadband.