Millions of workers were able to claim tax relief on expenses they incurred from working from home during the Covid-19 pandemic – but the rules have changed since then.
Some people will still be eligible to make a claim for 2022-23 and beyond, but only in certain circumstances. If you were forced to work from home during the pandemic, the good news is, you may still be able to claim tax relief, even if you only worked from home for a short time.
Here, Which? explains what the rules are around getting tax relief for working from home, and how to make a claim.
Who can claim tax relief for working from home?
Your eligibility to claim tax relief for additional household costs you incur from working from home depends on a few things – whether you’re employed or self-employed, whether you have the option of working from an office or other workspace, and which tax year you’re looking to claim tax relief for.
If you’re employed, you’ll only be able to claim tax relief if your employer hasn’t already reimbursed you for the extra costs.
If you’re employed: You may be able to claim if you have to live far away from your office as a requirement of your job, or if your employer doesn’t have an office. You can’t claim simply because you choose to work from home.
If you’re self-employed: If you work from home, rather than from a business premises, you can either add work-related expenses when you file your 2022-23 tax return, or you may be able to claim by using the government’s online service beforehand.
For 2021-22 and 2020-21
If you’re employed: If you were told to work from home due to government restrictions related to the Covid-19 pandemic, you may be eligible to claim tax relief for any extra costs you incurred.
If you’re self-employed: You can detail work-related outgoings from working from home on your self-assessment tax return; if you don’t want to split out specific expenses, you can opt for simplified expenses where you can use flat rates for working from home. Note that you can’t claim expenses if you also claim the £1,000 trading allowance.
For earlier tax years
If you worked from home before the pandemic, the rules on claiming expenses were broadly the same as they are now. That is, if you were employed, you can only claim if you did not have the option of working in an office, or if your job requires you to live a long way from your place of work.
How do you make a claim?
If you’re employed, one of the easiest ways to check if you’re eligible to claim this tax relief is by using the government’s online tool. You’ll be guided through a series of questions to gauge your circumstances, and if you’re eligible to claim you can do so online. You’ll need a Government Gateway ID (if you don’t already have one, it takes roughly 10 minutes to set up), your National Insurance number and either a recent payslip, P60 or UK passport.
The tool can help you claim for current and previous tax years.
If you’re employed, the tax relief will usually be paid via changing your PAYE tax code – reducing the amount of tax you pay during the subsequent tax year.
If you’re self-employed, you can add working from home expenses as part of your self-assessment tax return along with any other money you’ve had to spend in order to run your business. These expenses can be deducted from your profits, which in turn reduce the amount of tax you’ll be charged.
How much tax relief can you claim?
Tax relief varies depending on your income tax band, and whether you choose to claim a weekly flat rate or based on the exact amount of extra costs you’ve incurred.
You can claim a flat rate of £6 a week from 2020-21 onwards, or £4 a week for previous tax years.
If you’re a basic-rate taxpayer and claim tax relief on £6 a week, you’ll receive the tax you paid on this amount: 20% of £6 is £1.20, which is around £62 per year.
Higher-rate taxpayers receive 40% tax relief, which equates to £2.40 per week, or around £125 a year.
If you want to claim for more than this, you’ll need to have evidence of what you’ve spent, such as receipts or bills. You can only claim for things to do with your work, such as gas and electricity used for your work area. You may need to work out the proportion of your bills used for work purposes, factoring in the size of the room you work from, and the time spent working in it.
Yet to file your tax return? Try the Which? tax calculator
If you’re due to file a self-assessment tax return for the 2021-22 tax year, the Which? tax calculator is a jargon-free online tool that can help you tot up the tax you owe, and suggests allowances and expenses that you might have forgotten.
When you’re done, it can also send your information directly to HMRC.