Working from home – tax relief

You will recall that our October newsletter contained details of how to claim tax relief for household costs if you have to work at home on a regular basis, either for all or part of the week for the 2020/21 tax year. HMRC have now extended this relief to enable a claim for the current tax year.  

Ordinarily where employees are not reimbursed by their employers for home working costs it is not possible to claim tax relief for such expenses. Due to the Coronavirus pandemic HMRC have confirmed that employees can claim tax relief of up to £6 a week in tax relief for working from home in both tax years ending 5th April 2021 and 2022.

You cannot however claim tax relief if you just choose to work from home, but with the UK in lockdown for much of the last 15 months and a “work from home if you can” standing instruction from the Government since 23 March 2020, many people working from home over the last year should qualify.

What you can claim for the 2020-21 tax year

For the 2020-2021 tax year, employees could claim up to £6 a week or £26 month in tax relief for working from home. This can either be paid by the employer tax free, or if no such sum is paid, this can be claimed back through HMRC. One requirement, however, is that the employee must be required to work from home by their employer rather than voluntarily working from home.

What you can claim for the current tax year 2021-22

With the various lockdowns continuing until at least 21 June 2021, the Government have extended the scheme into the 2021-22 tax year, which started on 5 April 2021 and if eligible, employees can claim tax relief on £6 per week.

How do you claim?

Employees do not need to keep receipts of their expenses and it is important to note this is not a £6/week (£26/month) tax rebate, but a claim for tax relief on £6 per week, so the amount you receive will depend on your income tax bracket. For a basic rate (20%) tax payer, £6 per week x 52 weeks at 20% = a tax refund of £62.40.

Alternatively, you can include a claim for home working expenses on your self-assessment tax return, so please confirm the number of weeks of home working when we prepare your tax return.

Please contact Karen Keeling if you have any questions.