Claim tax relief for working from home

23 February 2021

To combat the spread of coronavirus, the Government stated that, where employees are able to work from home, they should do so. Individuals working from home on a regular basis, for all or part of their working week, may be able to claim tax relief on additional household costs.

Tax relief cannot be claimed where an individual actively chooses to work from home.

Additional costs could potentially include:

  • Heating
  • Metered water bills
  • Home contents insurance
  • Business calls
  • A new broadband connection

They do not, however, extend to costs that would remain unchanged regardless of whether a person was working at home or in an office. Examples include rent or council tax.

There may be the possibility of claiming tax relief on equipment that an individual has purchased, such as a laptop or a chair.

Tax relief can be claimed on either:

  • £6 a week from 6 April 2020 (in previous tax years, the rate was £4 a week) – no evidence is required in relation to these additional costs
  • The exact amount of extra costs above the weekly amount – evidence for this is required

Tax relief is offered at the rate at which a person pays tax. If someone pays the basic rate of tax of 20%, for example, and claims tax relief on £6 a week, they would receive £1.20 per week in tax relief.

CIPP comment

When applying  for tax relief for working from home online, there is no option to add in an end date of homeworking, so where employees have worked remotely, and then in the office, for example, then they still receive tax relief for the remainder of the tax year. The relief is offered via the individual’s tax code, as it is adjusted accordingly, and notification of this is sent to both the employee and the employer.

HMRC has confirmed that this is correct, and that those who apply successfully will continue to receive the adjustment in their tax code until the end of tax year 2020-21, with no requirement for individuals to notify HMRC if they have returned to the office in the current tax year.

 


The information in this article is accurate at the time of publication. For all the latest information, news and resources on how the COVID-19 pandemic is affecting payroll professions, visit our Coronavirus hub.