Claiming tax relief for working from home
If an employee has worked from home in the 2019-20 and the 2020-21 tax year’s they can claim a round sum HMRC allowance for both tax years.
For 2019-20 this was £4 a week = £208.
For 2020-21 this is £6 a week = £312.
As an employer you can pay this amount to your employees free of tax. If you are a sole director of your company you can pay this to yourself from your company free of tax.
Employees wanting to claim this relief can claim this via their self assessment tax return on the employment pages. If they do not complete a self assessment tax return they can telephone HMRC and ask for the allowance to be included in their tax code. Alternatively employees can apply quickly and easily using the HMRC online service, which is now open for claims covering periods up to 5 April 2022. For more information go to GOV.UK and search ‘tax relief job expenses’.
If an employee wants to claim more than this HMRC allowance they must be able to prove that they have incurred additional costs include heating, metered water bills or business calls that have been incurred wholly, exclusively and necessarily as a direct result of working from home. Receipts will need to be kept.
These additional costs do not include costs that would stay the same whether employees are working at home or in an office.