What tax relief can I claim for working from home?

26th October 2020

Thanks to the global pandemic, more of us than ever before are now working from home. Although it began as a temporary arrangement for many, several major employers have already pledged to close offices and shift to remote working on a permanent basis. You could be eligible to claim tax relief for working from home. Read our guide to find out more. 

What tax relief can I claim for working from home?

Can I claim tax relief for working from home?

In normal times, employees are eligible for tax relief if their employer requires them to work from home on a full or part-time basis.

However, HMRC has issued new guidance to employers in light of the Covid-19 pandemic advising that employees who are temporarily working from home can also claim for costs incurred.

The tax relief is to cover costs such as additional broadband, electricity or heating that would not ordinarily be incurred if they were working in the office.

How much can I claim?

As of 6th April 2020, you can claim a tax-free allowance of up to £6 per week for home-working expenses (£4 p/w prior to this date).

You may be able to claim above this amount (e.g. if you have had to purchase a desk or take out a broadband contract to facilitate working), however there is strict criteria for this and you must be able to demonstrate that the purchase is exclusively for business use.

Your employer may agree to reimburse you for these expenses and they will be tax free, provided they are not to be used for any significant personal use.

In October 2020, HMRC confirmed that it will now accept claims for the entire 2020/21 tax year – regardless of how many days you have actually had to work from home. This means that even if you have only had to work one day at home since 6 April 2020, you are entitled to claim the full amount for the year.

How do I claim tax relief for working from home?

There are two ways to claim:

  • Employers can pay you an additional £6 per week (tax free)
  • You can claim tax relief on £6 per week – either via a self-assessment if you already have to complete one, or a simple P87 form online or via post. The claim lasts for the whole tax year and is worth £62.40 for basic rate taxpayers and £124.80 for higher rate taxpayers

If you are claiming via self-assessment or P87, HMRC has advised you will not need to keep any receipts or provide proof for claims up to £6 per week. Amounts above this amount will require receipts.

Talk to the experts

Our Sunderland-based tax experts are always on hand to answer tax queries related to working from home. Get in touch to speak to our team.

All information correct at time of going to print/live and on the best knowledge and understanding of the author at the time.  This article is for general information only and does not constitute financial advice or recommendations for individual circumstances.  No responsibility is taken for any actions taken on the base of the information within this article.

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