Working from Home Tax Relief – Have you claimed?

HMRC have revealed almost 800,000 employees have claimed this tax relief since the start of the pandemic.

Where employees have been instructed to work from home by their employer, they are eligible to receive this form of tax relief. In the early days of the pandemic, and more recently through the second and third national lockdowns, most people who could, were working from home. In the months when freedoms were relaxed some employees were choosing to adopt a hybrid of socially distanced office working and home working, and this mixed method of work location seems very much here to stay.

With this is mind, WFH tax relief is also available to anyone who has worked at home during 2021 and who will be returning to their regular working environment at any point during the rest of the tax year (until the 5th April 2022).

For those who complete a self-assessment tax return, the expenses claim is made in their return.  For employees who do not have to complete an annual tax return applying for the relief is straightforward and can be done via  Claim tax relief for your job expenses: Working from home - GOV.UK (www.gov.uk)

Once an individual has made their submission and it had been successfully accepted, they will see an automatic adjustment in their tax code and the tax relief will be automatically added to their salary. The tax relief is available up to £6 a week to cover additional costs as stated below with no supporting records required. Employees may submit a claim for increased amounts (with receipts) for additional specific wi-fi data connection, phone and mobile calls, heat, light and water. If an individual’s employer reimburses them for the extra expense, they incur then they can’t claim the tax relief, but the reimbursements are tax free.

For self-employed individuals, there are two options.

Claiming a Flat rate - which starts at £10 per month for working more than 25 hours at home or 6 hours per week rising to a maximum of £26 per month for working 101 hours or more from home.

The alternative to flat rates is a calculation-based claim. (This option could be considered if you have a mortgage or rent your property)

The calculation-based claim is based on the number of rooms used in the house, the number of hours per week worked at home as a proportion of the collective cost of heating, lighting, water, council tax, mortgage interest or rent, insurance, wi-fi and telephone use.

Our team of tax experts can advise on the best options for your circumstances, help with claim submissions and answer any questions you may have.  Please email hello@wrpartners.co.uk for further information. 

The coronavirus pandemic highlighted working from home from March 2020, but if you or your employees have been doing this before that time, it is not too late to claim. You can back date claims for 4 tax years and make a submission now to claim for these working from home costs which could result in a sizeable tax refund.