The working from home tax relief was introduced during the Covid-19 pandemic as a result of many people being told to work remotely if possible., However, as more and more workers have returned to the office permanently, or through hybrid working, the rules have gradually evolved to reflect this shift.
In this article, we explain the changes that affect working from-home tax relief, how to make a claim or a backdated claim, and what the relief can be used for.
What are the changes to work from home tax relief?
When it was first introduced in 2020, the working from home tax relief was claimed by over 3 million people for the 2020/21 tax year, and it was possible to claim it as long as you were working from home. However, in April 2022, the government’s stance changed significantly to mean that people were only able to claim relief if they had to work from home, such as if they worked for a company that wasn’t office based, or their job required them to live far away from the office.
Who is now eligible for working from home tax relief?
You can only claim tax relief if you have to work from home and you’re not receiving expenses directly from your employer to cover the extra costs of working from home. You cannot claim tax relief if you choose to work from home. This includes if:
- your employment contract lets you work from home some or all of the time
- you work from home because of coronavirus (COVID-19)
- your employer has an office, but you cannot go there sometimes because it’s full
So, if you work from home simply because of COVID-19, your contract is flexible on whether you work at the office some or all of the time, or your office is sometimes full so you choose to work from home, you can’t claim work from home tax relief.
It’s not a huge surprise that the relief has been rolled back, as since COVID this allowance has been taken advantage of by a lot of people. The lack of a time limit meant that you could work at home for one day of the year and claim the whole working from home tax relief allowance, so many people were claiming the allowance just because they could.
What can you actually claim tax relief for?
You can only claim tax relief for things that directly help you do your job, such:
- Gas and electricity
- Metered water
- Business phone calls
- Internet access for work use
- Equipment used exclusively for work such as a desk, chair etc.
To make a claim, you may need to create your Government Gateway. If needed, you’ll need your NI number and a form of ID (e.g. P60 or valid UK passport). You’ll also need evidence like receipts and bills to hand if you’re looking to claim an exact amount for costs. Once your application has been approved, your tax code will be adjusted, so you’ll receive this tax relief directly through your salary.
Can I backdate my claim for tax relief?
Yes, you can backdate your claim for up to 4 years, even if you are no longer eligible under the new rules. Here are the deadlines for backdating claims:
- 5th April 2025 – Deadline to claim for the 2020/21 tax year working from home tax relief.
- 5th April 2026 – Deadline to claim for the 2021/22 tax year working from home tax relief.
How much tax relief could you be entitled to?
The amount you get depends on what rate taxpayer you are. Here is what you could get:
- Basic rate taxpayer (20%) – Claim £1.20 per week or £62.40 per tax year
- Higher rate taxpayer (40%) – Claim £2.40 per week or £124.80 per tax year
- Additional rate taxpayer (45%) – Claim £2.70 per week or £140.40 per tax year
You can also claim the exact amount of extra costs you’ve incurred, above the £6 a week amount, but you’ll need evidence such as receipts, bills or contracts to do this.
We’re here to help
We hope this has outlined to you the new changes to the work from home tax relief and how to claim. If you need any assistance with working from home tax reliefs such as advice on if it’s worth making a claim for relief, or support setting up a claim itself- we’re here to help you!
At Nordens Chartered Accountants, we offer expert advice and assistance with all of your business needs: from your everyday accounting to Advisory, Tax, Audit and more! Whatever you need guidance or assistance with, we have the knowledge and expertise to support you.
For support with any accounting services, look no further than Nordens Chartered Accountants. Contact us today at 0208 530 0720 or fill out our contact form to schedule a consultation.
