How to Claim Working from Home Tax Relief in the UK?

If you work remotely, you may be able to claim tax relief working from home.

The Working From Home Tax Relief is still available to millions of employees, who can get up to £420 in tax relief.

However, HMRC has cautioned that the number of individuals who may claim it for the current tax year (2022/23) will decrease as more people return to the workplace.

Even if you have been requested to work from home for a single day, you may still make a claim for the whole tax year.

If you have not been requested to work from home but want to do so anyway, then you cannot do so for the tax year in question.

You have until 5 April 2025 and 5 April 2026 to file for working from home tax relief for the tax years 2020/21 and 2021/22, respectively.

If you’re one of the many people who work from home, you know that there are a lot of benefits to it. But did you know that there are also tax deductions available to you?

Here’s everything you need to know about the UK working from home tax relief.

What is the working from home allowance?

In 2003, the government offered tax relief for those who work from home.

It permits those who work from home to receive a portion of their taxes back to assist in covering the additional household expenses connected with working from home. For instance, rising electricity and heating expenses.

It used to amount to a tax-free sum of £4 per week. However, because the pandemic compelled millions more individuals to work from home, the government increased the weekly payment to £6.

Additionally, the regulations have been temporarily modified so that you do not need to provide evidence that you usually work from home.

You can instead claim up to £280, even if you simply worked from home for a single day.

Can I receive tax relief for working from home?

You must fulfill the eligibility requirements to qualify for working from home tax relief:

  • Your employer has informed you to work from home. If you chose to work from home, you are not eligible.
  • Because you work from home, your household expenses have gone up.
  • Your company does not reimburse you for the additional expenses linked to working from home.

Self-employed individuals are ineligible to apply for working from home tax relief. However, you may list some expenses on your tax return.

The working from home allowance can be claimed retroactively, so there is still time to file for the 2020-21 and 2021-22 tax years.

How to file a claim for the work from home tax relief?

Working from home can provide you with numerous tax perks. The HMRC has established a dedicated portal where you may claim working from home tax relief.

Before you can advance with your claim, you will be asked various questions to determine your eligibility.

To file a claim, you will need your Government Gateway user ID and password. Creating a user ID takes a few minutes if you don’t already have one.

If you pay your taxes through self-assessment, you cannot claim the working from home allowance through the site. You must instead apply through your tax return.

Can I claim the working from home tax relief if I pay my taxes via self-assessment?

You won’t be able to utilize the microservice if you file a self-assessment tax return, but you will be able to claim anyhow.

Complete the ‘other expenses and capital allowances’ portion of the employment section of your online tax return.

Section 20 of the full return form and section 2.5 of the short form are where you’ll find it on paper returns.

What am I eligible for under the working from home tax relief?

The working from home allowance is intended to offset the additional expenses you encounter when working from home instead of the office.

It might be difficult to determine how much of your heating or energy bill is attributable to the time you spent at your desk. Therefore, you could potentially claim a flat amount of £6 per week.

This payment can be obtained in two ways:

  • It’s paid for by your employer. You may earn an additional £6 per week tax-free from your salary.
  • HMRC will allow you to make a claim for tax relief on it. If your company does not pay for your work from home allowance, but you incur additional, inevitable expenses as a result, you may deduct the cost from your taxable income. Then, you request tax relief from HMRC.

The amount you receive is dependent on your tax rate. Here’s what you could receive as a result:

  • £1.20 per week or £62.40 per year for taxpayers at the basic rate (20%).
  • £2.40 per week, or £124.80 per year, for taxpayers at the higher rate (40%).
  • £2.70 per week or £140.40 per year for taxpayers paying the additional rate (45%).

If your home office expenses exceed £6 per week, you may be eligible for bigger tax relief.

Nevertheless, you must give the taxman proof of your expenses, including receipts, invoices, or contracts.

You must also demonstrate that these expenses were directly related to your employer’s need that you work remotely.

What expenses may I claim for tax relief if I work from home?

The working from home allowance may be claimed for any additional expenses connected with working from home.

This consists of:

  • Electricity charges
  • Heating bills
  • Bills for metered water usage
  • Internet expenses
  • Business phone calls

However, you can only deduct a portion of your bill, namely the portion attributable to your increased presence at home.

How is tax relief for working from home paid?

How you get compensated depends on the year you file a claim.

If your claim for relief for the 2020/21 tax year has been accepted, you will receive your entitlement as a lump sum in your income.

For the 2021/22 tax year, HMRC will modify your tax code to reduce your monthly tax liability.

Your overall tax liability will be modified appropriately if you file a self-assessment tax return.

Sunny Hoi

Sunny Hoi

Sunny is an experienced content strategist. He has a deep understanding of the retail and finance industries. Sunny has written extensively about products, services, stores, stocks, cryptocurrencies, and investment strategies. Sunny's writing reflects his deep understanding of his subjects and commitment to providing clear, concise information that helps readers make informed decisions.

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