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Working from Home Tax Relief UK

Vincent Nyoike
Vincent Nyoike Tax

Working from home tax relief was introduced in 2003, and before the Covid-19 outbreak, it was capped at £4 per week. Beginning 6th April 2020, employers can pay their employees up to £6 a week or £140 per year for any additional costs they incur while working from home. The Covid-19 pandemic led to lockdowns and many people were forced to work from home. Consequently, there were additional costs for working from home leading to an increase in tax relief from £4 to £6 per week.

While working from home, you are likely to incur additional costs like electricity, heating, or internet. Your employer should provide you with tax relief while working from home to cater to these additional costs. This article will highlight what working from home tax relief is, eligibility and how you can claim it.

What is Working from Home Tax Relief?

Working from home tax relief is a tax relief given to employees by their employers for additional costs they incur while working from home. You can claim working from home tax relief of up to £6 per week or £140 per year if you are working from home.

Who is Eligible for Working from Home Tax Relief?

You can claim working from home tax relief if:

  • Your job requires you to live far from your office
  • Your employer does not have an office

Who Cannot Claim Working from Home Tax Relief

You cannot claim working from home tax relief if:

  • Your work from home due to Covid-19
  • Your employer has an office but you cannot go there because it is full
  • Your employment contract requires you to work from your home

What Can I Claim Tax Relief On?

You can claim working from home tax relief on the following:

  • Additional costs on utilities like gas, heating, electricity, or internet
  • Work-related phone calls
  • You may also get a tax rebate for accessories bought for work

How Much Tax Relief Can I Claim?

Working from home tax relief is designed to cover your extra expenses while working from home. It can be challenging to determine how much of your home expenses are related to your work. As such, a flat rate of £6 per week is set as a working from home tax allowance.

Read also: Do you pay taxes on social security?

How to Apply for Working from Home Tax Relief

You can check if you qualify for working from home tax relief on the HRMC portal. If you qualify, you need a Government Gateway user ID and a password to make a claim. If you don’t have one, it will take you only a few minutes to generate one.

After logging in, you need to provide details like when you started working from home. However, if you pay your tax through self-assessment, you can only apply for a working from home tax allowance through your tax return.

You may need to fill in a P87 form online. Some of the details you need to provide include:

  • Employer’s name
  • Job title
  • PAYE reference
  • National insurance number
  • Your expenses
  • If you are using your home as your office

After completing the P87 form, you need to fill out two sections:

  • The amount your employer is reimbursing you for additional expenses while working from home. If there is no reimbursement, this will be £0.
  • The amount you pay for the time you have been working from home. This will be £6 per week.

HMRC will then adjust your tax code and you will get the tax relief through your salary.

Summary of Working from Home Tax Allowance UK

If your employer is not reimbursing you for extra expenses you incur while working from home, you can make a request to get working from home tax relief from HMRC. You need to justify that you work from home to have the claim approved. If you have made a tax claim in the past and you are no longer eligible, you need to check your PAYE tax code. Otherwise, you will get a heavy surprise tax bill.

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