Tax relief for working from home

Working from home has become the new normal for much of the UK workforce.  During the first national lockdown in 2020, the Office for National Statistics recorded that nearly half of those in employment (46.6%[i]) performed some work at home.  Not all of that group will necessarily be aware that tax relief for additional household costs is available to them – this includes anyone forced to work from home due to coronavirus (COVID-19).

Who is eligible?

More than half of the working population of London (57.2%) did some work from home during April 2020.  As more sectors have been able to open safely and more workplaces have been made COVID-secure, the number of home workers has fallen.  However, by the end of 2020 only 51% of the workforce were at their normal place of work.  The 49% not at their normal place of work also includes those employees currently on furlough, but clearly there are many still working from home and eligible to claim.

If you have to work from home on a regular basis, tax relief is available on £6.00 per week for which you will not need to provide evidence of the expense.  Importantly, you will not be able to claim this if you choose to work from home.  The relief is for additional household costs that homeworking incurs, such as heating, metered water bills, home contents insurance, business calls or a new broadband connection.  They do not include costs that would stay the same whether you were working at home or in an office, such as mortgage interest, rent or council tax.

How much you can 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 have incurred above the weekly amount – you will need evidence such as receipts, bills, or contracts.

Claimants will get tax relief based on the rate at which they pay tax. For example, if someone pays the 20% basic rate of tax and claim tax relief on £6 a week, they will get £1.20 per week in tax relief (20% of £6).

Claiming for equipment

Employees may also be able to claim tax relief on equipment bought to enable them to work from home, such as a laptop, chair, or mobile phone.  Conditions apply to this relief – they must need the equipment to do their job and use the equipment for work and not significant private use.  If an employer provides any money towards these items, the amount must be deducted from the claim.

The tax relief on offer may only be a small amount but it is there for those who need it, and it is straightforward for an employee to claim through their personal tax account with HMRC online.

If you have any questions regarding this, please feel free to contact info@briarsgroup.com.

[i] All figures taken from The Office for National Statistics report: Coronavirus and homeworking in the UK: April 2020