If you’ve been told by your employer to work from home, make sure you claim the additional tax relief you’re entitled to.
Since 2020, employers have been able to pay their employees up to £6 a week tax-free to help them cover household expenses such as heating and electricity while they work from home. If you’re employed, you’ll be able to claim tax relief if your employer hasn’t already reimbursed you for the extra costs.
If your employer isn’t paying you an additional working from home allowance, you may be able to claim tax relief on £6 a week directly from HMRC for both this tax year (2023/24) and the previous two tax years, without having to provide any evidence of the extra costs you’ve had to pay. Bear in mind that you can’t claim this allowance if you choose to work from home, and certain rules apply – you’ll only be eligible if you’ve had to work from home. Here’s what you need to know.
- How much tax relief can I claim?
- Do I have to have worked from home the whole time to claim tax relief?
- What if there’s more than one of us working from home?
- How do I apply for working from home tax relief?
- What documents do I need for my tax relief claim?
- Can I still claim this tax relief if I file an annual tax return?
- How will I receive the money?
How much tax relief can I claim?
The amount of tax relief you’ll be able to claim depends on the rate at which you pay tax. For example, basic rate taxpayers, who pay tax at 20% and claim tax relief on £6 a week would receive £1.20 a week in tax relief (20% of £6). Over a year, this would mean they can reduce the amount of tax they pay by £62.40.
Higher rate taxpayers who pay tax at 40% can claim £2.40 a week (40% of £6 a week), or £124.80 over a year, while additional rate taxpayers, who pay the top 45% rate of tax, can claim £2.70 a week in tax relief, equivalent to £140.40 a year. The amount you’ll get if you live in Scotland will differ, as income tax rates aren’t the same as in England and Wales, but tax relief will still correspond with the tax rate you pay.
If you think your additional expenses from working from home are higher than £6 a week, you can claim tax relief on the exact amount they are but you’ll need to supply HMRC with evidence such as receipts, bills or contracts.
Do I have to have worked from home the whole time to claim tax relief?
In the current tax year, your claim will be calculated on a weekly basis, so if you work from home for one or more days in a week, you can claim for that whole week. You can make your claim in advance for the current tax year 2023/24, but as it is calculated on a weekly basis, gov.uk advises that you wait until you know how many weeks you’re making a claim for.
For previous years, you are able to make a tax relief claim for the entire year, even if you’ve only worked from home for a day or more since 6 April 2020 and have had higher expenses as a result. If you haven’t yet made a claim, you can claim for the 2020/21, 2021/22 and 2022/23 tax years.
What if there’s more than one of us working from home?
The allowance applies per person, so if two of you are working from home, you can each claim tax relief separately.
How do I apply for working from home tax relief?
HMRC has introduced an online microservice to make it easier for people who are working from home to claim tax relief. If you don’t submit an annual tax return, you can use the service here.
If you have an existing ‘Government Gateway’ account, which you use to check your state pension or your tax credits, you can submit your Government Gateway credentials to confirm your identity. If you don’t have a Government Gateway account, you’ll need to create one, which you can do as part of the application process.
What documents do I need for my tax relief claim?
You’ll need to supply HMRC with evidence that your additional expenses from working from home are higher than £6 a week.
This may include receipts, bills or contracts, showing the costs you’ve incurred. To create a Government Gateway ID, you’ll also need some paperwork, including your National Insurance number and a form of ID such as a recent payslip or P60, or a valid UK passport.
Can I still claim this tax relief if I file an annual tax return?
Yes, although not through HMRC’s microservice. Instead, you’ll need to claim the relief through your self-assessment tax return. Again you can apply for the whole year, even if you’ve only worked from home for part of it, and for the previous tax year.
How will I receive the money?
You won’t be sent a cheque or have any money paid into your bank account. Instead,
your tax code will be adjusted once HMRC has approved your application and you’ll receive the tax relief directly through your salary.
Essentially, the relief reduces the amount of tax you pay, so you’ll have a little bit of extra income each month.