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Working From Home - Claiming Tax Relief On Home Expenses

The COVID-19 pandemic has seen a big shift in the working practices of many employees with the country slowly recovering and carefully loosening restrictions, many employees continue working from home for various reasons – saving the employer money on premises and work-life balance.

Working from home is not for some with some employees having to be in an office or preferring to be office based but for the employees that are continuing to work from home, there are tax benefits available to most. HMRC have historically stated that you can’t claim the expenses if you ‘chose’ to work from home however, with the pandemic forcing many to work form home for a variety of reasons, ‘choosing’ to work from home is not as cut and dry as it used to be.

What expenses can be claimed by working from home?

  • Heating (gas and electric)
  • Metered water bills
  • Home contents insurance
  • Business calls
  • New broadband connection
  • Office equipment such as a desk or laptop

For expenses such as heating, only the part of the bill that relates to work can be claimed, not the whole bill. One method is to work out how many rooms you have in your home and identify how many of those rooms you use for business - and also calculate how much time you actually use these rooms for business. For example:

  1. There are 10 rooms in your home
  2. You only use one for business
  3. 90% of the use of that room is for business

You would add up all the costs that you can claim and multiply that by 1/10 and then by 90%, to get the accounts figure for the business use of your home.

How Much Can Be Claimed

You can either claim tax relief on:

  • £6 a week from 6 April 2020 (for previous tax years the rate is £4 a week) - you will not need to keep evidence of your extra costs
  • the exact amount of extra costs you’ve incurred above the weekly amount - you’ll need evidence such as receipts, bills or contracts

You’ll get tax relief based on the rate at which you pay tax. For example, if you pay the 20% basic rate of tax and claim tax relief on £6 a week you would get £120 per week in tax relief (20% of £6).

How To Claim

To check if you are eligible to claim, click here.

This service asks a number of questions and will advise if you are eligible. If you are eligible, you will then need to use a Government Gateway ID to claim, if you do not have one, the will be an option to create one. It takes around 10 minutes to set up the Government Gateway, you will need:

  • Your National Insurance number
  • A recent payslip, P60 or a valid passport

Once the Government Gateway has been set up, you will be able to proceed claiming for the expenses. The form will allow you to save the information and return to it should you need to.

If you are claiming more than the flat rate of expenses, you will need to have records of purchases and receipts. If your employer pays some of the expenses (but not all) then the amount paid needs to be deducted from the allowable rate. 



 

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