Working from home due to coronavirus? Claim a year's worth of tax relief

If your employer requires you to work at home, you can – and always have been able to – claim for increased costs due to working from home.

Additional costs include things like heating, metered water bills, home contents insurance, business calls or a new broadband connection. They do not include costs that would stay the same whether you were working at home or in an office, such as mortgage interest, rent or council tax.

Right now, many businesses have closed workplaces (again) and that means across the UK millions of staff are temporarily required to work from home, even if it's just for part of the week.

Check if you can claim here

Apportioning extra costs such as heating and electricity is tough. So instead you can, in simple terms, claim a rate of £6 a week. There are two ways to do this:

Employers can pay you £6 a week extra tax-free

Employers can give you an allowance up to this amount and what they give you is free from tax, so you get it all.

But right now – with many businesses struggling – asking may be bad timing, so instead you can...

Claim tax relief on £6 a week

If your employer doesn’t want to pay expenses for your extra costs due to necessary working from home, but you have them, then you can ask for the amount to be deducted from your taxable income.

To make the process easy, HMRC says that claims in line with the employers' payment (ie, for £6 a week) will not need to justify that figure – meaning you won't need to keep receipts or prove information. Tax relief of £6 a week equates to a gain of £1.20 a week for a basic 20% rate taxpayer, £2.40 a week for a higher 40% rate taxpayer.

HMRC changes to the system

For this tax year only, you only need to claim once, and you automatically get it claimed for ALL of this tax year at the £6/week relief rate. That's a gain of £62/year for basic rate taxpayers, £124/year at the higher rate.

So if you have had to work at home at any point since 6 April 2020 (the start of the tax year) and you have higher costs due to it, no need to delay, claim immediately.

How to claim

Last month, HMRC set up a new dedicated working-from-home microservice that will automatically apply the whole 2020/21 tax year's relief via your tax code – making claiming the whole amount very easy. Anyone making a claim for this tax year, who hasn't already put in a claim, can use it.

You'll need to have your Government Gateway ID to do it. If you don't have one, you can create one as part of the process. Along the way you'll also be asked if you're claiming any other work-related expenses, and as a note, if you wear a uniform to work, it's worth reading our Uniform Tax Rebate guide first, to see if you can claim that too.

The tax relief is applied by altering your tax code, which is what indicates to your employer how much tax to take off your payslip – it should be amended in your personal tax account within a couple of days. The result will be less tax taken off each month for the rest of the year which means you'll take home more.

If you have any questions around your tax obligations or want to know more about tax relief, call Ian on 01772 925 230.

Alternatively, fill in the form on our Contact Us page, and we’ll get back to you.