We cover everything you need to know about the working from home tax relief and how you can claim it
Since the start of the pandemic and the shift to remote working, many of us had to invest in new work set-ups and equipment to help us work efficiently. Over a year later, some of us are still working from home and may be planning to work from home for the foreseeable future, which is why organisations need to educate employees on the financial support available to them if they are struggling with the cost of working remotely.
In an office, an employer is responsible for making sure that employees have the right technology and equipment – and that it works properly – and for making sure that the environment is suitable for work. At home, this responsibility lies solely on you.
You have to have a strong Wi-Fi connection, heating should be on when it’s cold (so that you’re comfortable while working), electricity needs to be on for most of the day – all of this comes at a cost. However, payroll teams need to let employees know that they can receive a helping hand by claiming tax relief.
Working from home tax relief
If you have to work at home on a regular basis, either for all or part of the week, you can claim tax relief for additional household costs. This includes if you have to work from home because of Covid-19.
You may be able to claim tax relief for:
- gas and electricity
- metered water
- business phone calls, including dial-up internet access
You cannot claim for the whole bill, just the part that relates to your work.
You may also be able to claim tax relief on the equipment you’ve bought, such as a laptop, chair, or mobile phone.
How much can I claim?
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
Eligible employees can claim a full year’s entitlement where they have been instructed to work from home by their employer, even in scenarios where they have only worked from home for one day during the tax year.
If you have returned to the office since early April 2021, or are due to return shortly, you can still claim the working from home tax relief for the entirety of tax year 2021-22.
Once you have successfully applied and had your application approved, you will see an adjustment to your tax code which will mean that the tax relief is applied automatically to your salary.
How can I apply for tax relief?
You can use the HMRC working from home tax relief portal, where you will be asked a series of questions to check if you are eligible or not.
You must have paid tax in the year. You’ll get tax relief based on what you’ve spent and the rate at which you pay tax.
What does this mean for payroll teams?
While it’s up to employees themselves to claim tax relief, payroll teams should be educating staff and letting them know that tax relief is available should they wish to claim it – sending out a quick email about tax relief and how employees can claim it could be a big help.
Open communication with all staff is also crucial so that employees feel comfortable with asking payroll teams for their knowledge and advice.