Working from home tax relief

20th October 2020

At the start of the pandemic, many employees were required to start working at home. Employers can pay employees £6 per week (£26 per month for monthly paid employees) tax free towards the increased costs due to working from home, for example gas and electricity costs. Alternatively, employees can claim income tax relief for the increased costs.

If you are an employee required to work from home, you can claim income tax relief at your marginal rate of tax on:

  • £6 a week from 6 April 2020 (for the 2019/20 tax year the rate is £4 a week); if you are paid monthly, £26 a month from April 2020 (for the 2019/20 tax year the rate is £18 per month).  You do not need to keep a record of the additional costs incurred
  • The exact amount of extra costs you’ve incurred above the weekly amount.  If you wish to claim over and above the weekly rate, you are required to keep all supporting documentation of the additional costs incurred due to ‘WFH’.  This can be an administrative burden and HMRC may review claims in excess of the weekly rate.

At the start of this tax year we were already in lockdown, since then offices have gradually started to reopen, but on 28 September 2020 the government advised office workers who could work effectively from home to do so. With the reopening of offices, some may have been required to work from home part-time, with the remainder of the week spent in the office. We are aware from HMRC that even if you work from home part-time, as long as you are required to work from home and have incurred additional costs, you can still claim income tax relief at the weekly/monthly rate.

Claims can be made on your Self-Assessment tax return. If you do not complete a SA return you can complete online through your government gateway account or complete form P87.

For more details about reliefs for working from home, please contact Danielle Ford or your usual haysmacintyre contact.

Danielle Ford

Partner, Head of Tax Disputes & Resolutions
+44 20 7969 5591
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