Here’s the latest update on Tax Relief for Employees who are working from home

Having now entered another tax year, HMRC have clarified the working from home allowance for 2021/22.

HMRC previously announced that for 2020/21, even if you were required to work from home for ONE DAY during the tax year, you can claim tax relief for the WHOLE YEAR.  HMRC have now confirmed that this will also apply to the whole of 2021/22.

The rate is set at £6 per week, £312 per year and can be claimed in one of two ways:

• 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/NIC, so you get it all.
• Claim tax relief on £6 a week  If your employer can’t/won’t pay expenses for your extra costs due to necessary working from home, but you have them, then you can deduct the amount 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.

  Taxpayers can claim online here Claim tax relief for your job expenses: Working from home – GOV.UK (www.gov.uk)

  If you are in self-assessment, a claim must be made through this and not via the method above.

Of course for some people, additional costs may well exceed £6 per week and in this situation you can claim more, but you will be required to evidence the increase in costs, and be able to apportion these specifically to working from home.  This is obviously more onerous and could also lead to a query from HMRC.

To talk to us about making a claim, please contact Paul Buckley, Associate, at this office by telephone 01429 234414 or alternatively you can email Paul directly (paul.buckley@waltonscw.co.uk).