Tax relief for working from home

Working from home became commonplace for many of us during the pandemic, and even now that workplaces are opening up and inviting employees back, many businesses are continuing to embrace a more flexible approach to where their staff do their day’s work.

Working from home tax allowance

If your employer requires you work from home, you’ve always been able to claim for increased costs, such as heat and electricity, for the specific time you’re working at home.

But during the 2020 lockdown HMRC launched a “microservice” which allows you to claim a whole year’s tax relief, even if you only worked from home on certain days.

£6 a week flat rate

From 6th April 2020 you can claim a flat rate tax relief of £6 a week. This applies even if you split your time between home and office. You also don’t need to keep receipts or provide evidence of that cost.

You get tax relief based on the rate at which you pay tax. This gives you a gain of:

– £1.20 a week for a basic 20% rate taxpayer (£62.40 a year)
– £2.40 a week for a higher 40% rate taxpayer (£124.80 a year)
– £2.70 a week for a top 45% rate taxpayer (£140.40 a year)

Claim for 2020/21 and 2021/22

Once you submit a claim, HMRC will normally adjust your tax code to take into account your working from home tax relief, including any refund of tax you are due.

You’ll need to submit separate claims for last year and this year, so even if you have already claimed home working tax relief for the 2020/21 tax year (year commencing 6th April 2020), you will need to make a new claim for the 2021/22 tax year.

Recap…

So, if you are any employee (including employed by an umbrella company), and you have worked, or work from home at all, you should be able to claim this. It’s better in your pocket than the tax man’s!

Start your claim