How to Claim Working From Home Expenses
If you are an employee who is working from home, you may be able to claim tax relief for some of the bills you pay that are related to your work.
Note that if an employee is working at home voluntarily, they cannot claim tax relief. However, these tax reliefs are available to anyone who has been asked to work from home due to the COVID-19 outbreak. HMRC received more than 3 million claims for the tax relief for the 2020-21 tax year and has also confirmed that the tax relief will continue to be available in the current 2021-22 tax year.
HMRC’s Director General for Customer Services, recently commented that:
‘Half a million people have already reduced their Income Tax this year by up to £125, by claiming tax relief on their working from home expenses.’
Employers may reimburse employees for the additional household expenses incurred by working at home. The relief covers expenses such as business telephone calls or heating and lighting costs for the room in which you are working. Expenses that are for private and business use (such as broadband) cannot be claimed. Employees may also claim tax relief on equipment purchased to facilitate working at home such as a laptop, chair or mobile phone.
Employers can pay up to £6 per week (or £26 a month for employees paid monthly) to cover an employee’s additional costs if they must work from home. Employees do not need to keep any specific records if they receive this fixed amount.
If the expenses or allowances are not paid by the employer, then the employee can claim tax relief directly from HMRC. Employees will get tax relief based on their highest tax rate. For example, if they pay the 20% basic rate of tax and claim tax relief on £6 a week, they will get £1.20 per week in tax relief (20% of £6). Higher rate taxpayers would receive £2.40 a week (40% of £6). Employees can claim more than the quoted amount but will need to provide evidence to HMRC.