The coronavirus pandemic saw a necessary shift to home working for many. Even as restrictions start to lift, agile working is likely to remain a permanent feature for many businesses beyond COVID-19.
As can be expected, additional household costs are likely to be incurred by working from home, such as heating and lighting, which you may not have been reimbursed for by your employer. In such cases, it is possible to claim a working from home allowance of £6 per week (£4 per week prior to April 2020) for tax purposes.
If your employer has required you to work from home at any point during the 2020/21 tax year, HMRC had previously confirmed that it was possible to claim the working from home allowance for the entire tax year. HMRC have now confirmed that this will also be the case for the 2021/22 tax year. Therefore, whether you have worked from home for just part of the tax year, or, for the full year but with a mix of office and home working you will still be able to claim the full year’s allowance.
No receipts are required to evidence the claim and providing that you have worked from home at some point during each tax year, it is possible to claim an allowance of up to £312 per year with tax relief given at the relevant rate of tax you pay. For example, a basic rate taxpayer would receive tax relief at 20%, so £62.40 per annum and double that for a higher rate taxpayer.
If your costs exceed the £6 allowance it is currently possible to claim tax relief for the exact amount of costs incurred where not reimbursed by your employer, however, supporting evidence will be required for such claims e.g. by retaining receipts, invoices or contracts.
It is expected that once the pandemic is over, the rules will revert back to those previously, with the allowance only being tax free where it has been paid by your employer.
How to claim
If you file a self-assessment tax return, the claim will need to be made as part of your filing submission for each tax year.
Otherwise, you can apply directly online and HMRC will adjust your PAYE code accordingly. To apply online you will need to create a Government Gateway ID, if you do not have one already and, to do so, you will need details of your national insurance number and either a recent payslip, P60 or valid UK passport. Online claims can be made www.gov.uk/tax-relief-for-employees.