41% of those working remotely have claimed the homeworking allowance on the Gov.UK portal

10 November 2020

As lockdown restrictions are imposed once again, and the Government advice is that those who can work from home, should, the CIPP’s Policy and research team wanted to assess if individuals are benefitting from the homeworking allowance that they are entitled to.

The homeworking allowance means that individuals who have been instructed to work from home can claim tax relief on £6 per week in relation to expenses incurred from working from home. This was the amount implemented from 6 April 2020 onwards.  The relief is based on the rate at which an individual pays tax, so is somebody pays the 20% basic rate of tax, they would receive £1.20 per week in tax relief. Similarly, if a person pays the 40% rate of tax, then they would receive £2.40 per week in tax relief. Individuals may also claim tax relief on the actual amount of extra costs they have incurred as a result of working from home, but they would be required to produce evidence of those amounts in the form of receipts, bills or contracts.

In order to gauge the extent of the use of the tax relief, a question was posted on the CIPP’s News Online page, which asked:

“How have you benefitted from the homeworking allowance?”

The most popular response was for individuals who have claimed the £6 allowance via the dedicated online portal on Gov.UK, with 41% confirming that this is what they have done. The process takes minutes to complete, and once finished, an adjusted tax code is generated for the claimant. This is also forwarded to the individual’s employer to apply to their payroll record. This ties in with the news that within a matter of weeks of the portal being made available, over 54,000 individuals applied for the tax relief in this way.

25% of respondents stated that their employer does not pay the homeworking allowance or, indeed, for any additional costs incurred from homeworking. 18% revealed that they simply do not claim the relief. 8% of individuals confirmed that their employer pays the homeworking allowance alongside their standard pay, whilst 6% claimed for the relief themselves at the end of the tax year. The lowest response rate was attributed to those that claim for actual expenses incurred from home working, with just 2% of respondents confirming that this applied to them.


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