homeworking allowance 2023

Home Office Tax Deduction: Work-from-Home Write-Offs for 2023

Can you claim the home office tax deduction this year?

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Like millions of people in the U.S., you may be fortunate to work from home. ( Data show that the number of people working from home nearly tripled over the past few years). That may make you wonder whether you can claim a home office tax deduction on your federal income tax return. After all, you likely have some unreimbursed expenses. For example, you might pay for printer paper, ink, and other office supplies. Plus, your electric and utility bills are likely higher since you're home during the day.

But the reality is not every taxpayer can claim the home office deduction. Here's what you should know about the home office tax deduction before you file your 2023 tax return.

Home office tax deduction: Who qualifies?

Some people who work from home can deduct their business-related expenses, and there is also something called the "home office tax deduction" that lets you write off expenses for the business use of your home. However, whether you can claim those tax breaks depends on your employment status.

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Employees miss out. If you're a regular employee working from home, you can't deduct any of your related expenses on your tax return.

In the past, you could claim an itemized deduction for unreimbursed business expenses, including expenses for the business use of part of your home if they exceeded 2% of your adjusted gross income. However, that deduction was temporarily suspended. It's scheduled to go back into effect in 2026.

Home office tax deduction for self-employed people

Self-employed people can generally deduct office expenses on Schedule C (Form 1040) whether or not they work from home. This write-off covers office supplies, postage, computers, printers, and all the other ordinary and necessary things you need to run a home office.

The home office tax deduction is an often overlooked tax break for the self-employed that covers expenses for the business use of your home, including mortgage interest, rent, insurance, utilities, repairs, and depreciation.

It doesn't matter what type of home you have (e.g., single family, townhouse, apartment, condo, mobile home, or boat.) You can also claim the home office tax deduction if you worked in an outbuilding on your property, such as an unattached garage, studio, barn, or greenhouse.

Note: You cannot claim the home office tax deduction for any part of your home or property used exclusively as a hotel, motel, inn, or the like.

Claiming the home office tax deduction might lower your tax bill , but to qualify, you must use part of your home "regularly and exclusively" as your principal place of business. If you only work from home for part of the year, you can only claim the deduction for the period that you can satisfy the "regularly and exclusively" requirements.

"Regular use" means you use a specific area of your home (e.g., a room or other separately identifiable space) for business regularly. Incidental or occasional use of the space for business doesn't count.

"Exclusive use" means you use a specific area of your home only for your trade or business. The space doesn't have to be marked off by a permanent partition. You can't claim the home office deduction if you use the space for business and personal purposes. However, the exclusive use requirement might not apply if you use part of your home:

For the storage of inventory or product samples; or
As a daycare facility.

The space must also be used:

As your principal place of business for your trade or business;
To meet or deal with your patients, clients, or customers in the normal course of your trade or business; or
In connection with your trade or business if it's a separate structure that's not attached to your home.

(See IRS Publication 587 for more information about these and other requirements for the home office deduction.)

How to calculate the home office deduction

If you qualify, there are two ways to calculate the home office deduction.

Under the actual expense" method , you essentially multiply the expenses of operating your home by the percentage of your home devoted to business use. If you work from home for part of the year, only include expenses incurred during that time.
Under the simplified method , you deduct $5 for every square foot of space in your home used for a qualified business purpose. Again, you can only claim the deduction for the time you work from home.

For example, if you have a 300-square-foot home office (the maximum size allowed for this method), and you work from home for three months (25% of the year), your deduction is $375 ((300 x $5) x 0.25).

Tax Tip: If you use the simplified method, you can't depreciate the part of your home used for business. However, to the extent you qualify, you can still claim itemized deductions for mortgage interest, real property taxes, and casualty losses for your home without allocating them between personal and business use.

The deduction is claimed on Line 30 of Schedule C (Form 1040) . If you use your home for more than one business, file a separate Schedule C for each business. Don't combine your deductions for each business on a single Schedule C.

If you use the actual expense method to calculate the tax break, also complete Form 8829 and file it with the rest of your tax return. If you use more than one home for business, you can file a Form 8829 for each home or use the simplified method for one home and Form 8829 for others. Combine all amounts calculated using the simplified method and amounts calculated using Form 8829, and then enter the total on Line 30 of the Schedule C you file for the business.

Employees with a side business

If you're an employee at a "regular" job, but you also have your own side hustle, you can claim deductions for business expenses and the home office deduction for your own business — if you meet all the requirements. Being an employee doesn't mean you can't also claim the deductions you're entitled to as a self-employed person.

Searching Money Mentor . . .

How to claim the working from home tax relief.

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Updated October 19, 2023

In this guide

How to claim the working from home tax reliefUK

Important information

Tax treatment depends on your individual circumstances and may be subject to future change.

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Were you told by your employer to work from home during the pandemic? If so you can apply for tax relief up to £140 per tax year .

Some workers will be able to claim for this 2022/23 tax year too, giving them up to £420 in tax relief . The money is to cover extra costs such as higher heating and broadband bills. Don’t worry if you have yet to claim as the HMRC deadline is a couple of years away.

In the article, we explain:

How does WFH tax relief work?
How to claim WFH tax relief
When is the deadline to apply for the relief?
Can you make a claim for the 2022/23 tax year?
Who is eligible and how do you check?
How much will you get in WFH tax relief?

Read more: Highest-paying jobs in the UK

What is WFH tax relief?

As a result of the pandemic, millions of people were told to work from home by their employers over the past couple of years.

While commuting costs will have fallen, other bills such as your gas, electricity and internet are likely to have increased as a result of you spending more time at home.

To help cover these extra costs, HMRC allows you to claim tax relief. You can do so using a designated online portal .

Around three million people made a claim for the entire 2020/21 tax year.

How to claim working from home tax relief

To claim for the working from home tax relief:

Head to the government’s microservice portal and answer the eligibility questions
During this process you also be asked about other work-related expenses that you could claim for too
your national insurance number
a recent payslip or P60 or a valid UK passport
Once logged in, state the date that you started working from home
If you have been working since the start of the first lockdown (23 March 2020 ) put that date in and you will get a rebate for two whole tax years (6 April 2020 to 5 April 2021 and 6 April 2021 to 5 April 2022) and the two weeks extra
If you have already claimed for 2020/21 tax year, you will not automatically receive a refund for the 2021/22 tax year. You must again use the microservice portal to apply.

NOTE: If you do self-assessment, you won’t be able to use HMRC’s online portal; instead apply for the tax relief in your tax return .

How is the tax relief paid?

You can backdate a claim to cover the first tax year of the pandemic (2020/21) and the two weeks before as well as the second year (2021/22), if you have been working at home since the first lockdown was announced on 23 March 2020.

Where an employee meets the criteria to claim tax relief for working from home and makes a claim for previous years, HMRC will issue a tax refund. This is usually in the form of a cheque.

If you are claiming for the current tax year then you will pay less tax when you are paid. This means your tax code will change.

How much tax relief will I get?

There are two options to getting the tax relief:

Your employer: can cover your expenses and pay them into your wages tax-free
You claim: given the difficult time that many businesses have faced, you are more likely to claim tax relief from HMRC instead of your employer covering the costs

NOTE: You can’t do both. You will be unable to claim tax relief if your employer is paying your expenses.

If you do claim yourself, how much you will get depends on the rate of income tax you pay:

Basic-rate taxpayers get £1.20 a week (tax relief of 20% on £6) = £62.40 per tax year
Higher-rate taxpayers receive £2.40 a week (tax relief of 40% on £6) = £124.80 per tax year
Top-rate taxpayers will receive £2.70 a week (tax relief of 45% on £6) = £140.40 per tax year

If you didn’t claim for last tax year or the one before but worked from home, you can backdate your claim. This means you would get up to two full years’ payment as a lump sum in your next salary.

If you are eligible to claim for the current tax year too, that’s three years of tax rebates, meaning:

Basic-rate taxpayers could receive as much as £187.20
Higher-rate taxpayers could get up to £374.40
Top-rate taxpayers could receive up to £421.20

HMRC will accept backdated claims for up to four years.

Working-from-home tax relief is an individual benefit, so a couple or a group of flatmates can all claim it if you are all working from home.

You can use our income tax calculator to work out your payments.

What is the deadline to apply for WFH tax relief?

If you worked from home during the 2020/21 and 2021/22 tax years but failed to apply for the rebate, you can still do so. HMRC says it has no plans to close the online portal or microsite.

Claims can be backdated, meaning that you may be eligible for up to £280 tax relief if you claim for both last tax year and the one before (essentially the two years during the pandemic). Few workers will be able to claim for the current tax year.

HMRC confirmed that you have until the 5 April 2025 to make claims for 2020/21 tax year, and until 5 April 2026 make claims for 2021/22.

Can I still claim for working from home tax relief in 2022/23 tax year?

Some workers will be able to claim for the current tax year. But many people won’t be eligible for this tax year as it is no longer a legal requirement to work from home.

You can claim if you have additional household costs as a result of working from home and your employer has not already paid these extra expenses.

In order to claim for this tax year, which started on 6 April 2022, one of the following must apply:

You can’t perform your job on your employer’s premises because they don’t have the facilities; for example, your employer has a small office with no space for you to work there
Your job requires you to live so far from your employer’s premises that it would be unreasonable for you to travel there every day; for example, the workplace is in Birmingham but your job requires you to work in Scotland
Or government restrictions mean you must work from home; though these restrictions have now been removed so can no longer be applied for this tax year

To claim tax relief, you cannot have just chosen to work from home.

HMRC also warned that employers who simply tell employees to work from home may not be sufficient to claim tax relief. So if you are hybrid working (that is, working from home for part of the week), you can only claim tax relief if there is a lack of appropriate facilities on your employer’s premises to do your job.

The government has outlined several examples where staff can claim working from home tax relief.

If you do meet the criteria for this tax year you could be entitled to as much as £420 in pandemic-related tax relief when you include the past two tax years.

Does my tax code change if I work from home?

Yes, if you are in receipt of the work-from-home tax rebate then your tax code will change.

You can usually find your tax code on your pay slip. The most common tax code for the 2022/23 tax year is 1275L. The number represents the personal tax allowance for most earners in the UK, which is £12,750 – this is the amount you can earn in a year tax-free.

So if you’re in receipt of the tax rebate, this code will change to reflect the fact that you have a larger personal tax allowance. Although bear in mind that this number could be different for other reasons, such as if you’re receiving a different tax benefit like a company car.

If you have claimed the working from home tax benefit in the past and you’re no longer eligible, you should check your PAYE tax code to ensure you’re not still receiving it.

It’s important to check because if you continue to claim while no longer eligible, you will be forced to pay additional tax at the end of the tax year.

If you are receiving the working from home tax rebate when you shouldn’t, get in touch with HMRC to get your tax code changed.

Who is eligible for tax relief for the last two tax years?

Not everyone is eligible to claim for the last two tax years so you need to check first that you:

Were told to work from home by your employer. You cannot claim tax relief if you chose to work from home
Have had to pay higher costs related to working from home (but you don’t need to show evidence of this)
Must not be receiving expenses directly from your employer to cover the extra costs of working from home

Do you pay tax by self-assessment? You can still claim the tax rebate but you need to apply for it in your tax return rather than through HMRC’s online portal.

If you are still unsure whether you are eligible, there is a government tool that can help you find out.

NOTE: If you are self-employed, you can’t claim because you work for yourself. However, you can claim expenses on your tax return.

If you are new to tax returns, check out our guide to self-assessment .

What if the rebate doesn’t cover my extra needs?

If the sum provided does not come close to the extra costs that you have incurred, you can apply for relief on higher sums.

There are two options:

If you complete a self-assessment form each year simply add the claim to that
Fill in the P87 form that allows workers to claim back expenses up to a maximum of £2,500

HMRC says that additional costs include things such as:

Metered water bills
Home contents insurance
Business calls
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 rent, council tax, or your chocolate digestive habit.

You will need:

Your employer’s name and PAYE reference (which you can find on your payslip or P60)
Your job title
Receipts (to provide evidence of these extra costs)

You won’t get back the full cost of the extra expenses, only tax relief on the total. For example: if you have spent £500 on extra costs, as a basic-rate taxpayer, you will see your net wages increase by 20% or £100.

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Tax news from January 2023

Working from home tax relief claims may still be possible for 2022/23

Published: 18 Jan 2023 Update History

Two relaxations were introduced as a result of the COVID-19 pandemic lockdowns to allow millions of employees to claim tax relief for the costs of working from home during the 2020/21 and 2021/22 tax years. These were:

the relaxation of the strict eligibility requirements; and
allowing relief to be claimed for the full year, even if there was a full or partial return to working at the employer’s location during the tax year.

From the current tax year 2022/23 onwards, employees who are eligible can still make a claim for tax relief for working from home. The claim can be made in self assessment (SA) returns, online , or on a paper P87 form .

The amount that can be claimed is £6 per week (£26 per calendar month), or actual evidenced amounts incurred on electricity and gas relating to the work area and business phone calls, as a deduction against earnings in respect of the weeks worked from home. A claim for the full tax year is no longer automatic.

Another key difference from 6 April 2022 for employees in England and other parts of the UK that did not continue COVID-19 working from home restrictions into 2022/23, is that the very strict eligibility requirements of s336, Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) apply.

These tests are summarised in HMRC’s guidance, at:

Claim tax relief for your job expenses - working from home
EIM32760: Other expenses: home: working from home
EIM32815: Other expenses: home: household expenses

For example, employees are not eligible to claim a deduction if they have chosen to work at home. Also, even if the contract allows the employee to work from home for some, or all of the time, no deduction can be claimed if the employer has appropriate facilities to allow the employee to work at the employer’s premises. An exception to this is where the nature of the job requires the employee to live so far from the employer’s premises that it is unreasonable to expect them to travel to those premises on a daily basis.

If making a claim for actual expenditure, a deduction is not allowed if the amounts are not wholly incurred in the performance of the employment (eg, costs of broadband that is used privately as well as for the employment).

It is not too late for employees to make a claim for 2020/21 and 2021/22. SA returns that have been submitted can be amended within twelve months of the filing deadline. HMRC’s portal allows backdated claims for up to four years.

agents cannot file claims online, but can submit a paper form;
claims cannot be made by phone;
employees in SA must claim via their SA tax returns, and
a claim cannot be made where the allowance (or reimbursement of evidenced amounts incurred) is paid to the employee by their employer, which would be tax-free under s316A, ITEPA 2003 , see HMRC’s guidance Expenses & benefits: homeworking .

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Our Complete Guide To Work From Home Tax Relief in the UK

As the work landscape continues to evolve in the wake of the global pandemic, more people are embracing the concept of working from home. To support these employees, the UK government has introduced a range of work from home tax relief schemes. In this comprehensive guide, we will discuss various tax relief options available for remote workers, including tax relief for working at home, how to claim tax relief for working from home, eligibility criteria and what’s changed with the work from home tax relief scheme in 2023.

What is The Work From Home Tax Relief Scheme?

The Work from home tax relief scheme, also known as Working from Home Allowance, is a Government scheme launched in 2003 to allows employees working remotely to claim tax relief on certain expenses incurred while working from home.

Initially set at a £4 a week tax-free sum, the allowance was increased to £6 a week with the pandemic forcing millions of workers to work from home.

Now that all Covid-related financial restrictions have been lifted, millions of employees are returning at work either full- or part-time. In response, HMRC revised its instructions for the 2022–23 tax year and overhauled some of their requirements to qualify for the tax relief.

Tax Relief for Working at Home: What Expenses Are Covered?

The tax relief for working at home aims to help home workers cover additional costs they might incur relating to business phone calls and electricity/gas.

A limitation of the work from home tax relief scheme is that you cannot claim claim back on bills that are used for both private and business use, for eg broadband.

Tax relief home working benefits can be claimed in two ways:

a) Flat-rate expenses: Employees can claim a flat-rate allowance of £6 per week or £26 per month, a standard amount set by the government to cover additional expenses incurred when working from home.

b) Actual expenses: If an employee believes that their actual expenses are higher than the flat-rate allowance, they can claim tax relief on the actual amount spent. However, this requires providing evidence and receipts for the additional expenses incurred.

If you wear a work uniform, specialist work clothing or Personal Protective Equipment (PPE), you may be able to claim additional expenses back .

How much tax relief can I claim?

You can either claim tax relief on:

£6 a week since 6 April 2020, or
the exact amount of extra costs incurred above the £6 weeklyamount, however you’ll need to provide evidence (receipts, bills or contracts).

Tax relief from working from home is based on the tax rate you pay. This means that if you’re on the basic taxpayer rate of 20% and claim back £6 of working from home tax relief, you’ll get £1.20 per week back. Per year, the tax relief adds up to:

£1.20 a week for basic rate taxpayers, or £62.40 a year
£2.40 a week for higher rate taxpayers, or £124.80 a year
£2.70 a week for additional rate taxpayers, or £140.40 a year

How to Claim Tax Relief on Working from Home

You can claim this payment in two ways:

Claim tax relief directly from HMRC with an online form, or
Your employer can pay it through your salary.

To claim tax relief directly with HMRC, head to their online portal . You’ll first need to answer a first questions online to ensure you’re eligible for the home worker tax relief scheme. Once qualified, you’ll be asked to log into your Government Gateway account with your user ID and password in order to submit your claim directly within the portal.

If you pay your tax with a self-assessment every year, you will need to submit your claim directly within your tax return - you won’t be able to claim the working from home allowance through your online portal.

You can claim tax relief for working from home for up to four tax years. The tax relief you’ll be able to get will depend on your tax rate for the period you’re claiming back and what the eligibility rules were for it as well.

Tax relief for working from home in 2023: What has changed?

The good news is that as remote working becomes more prevalent in the UK, the Government continues to support employees through work from home tax relief schemes.

Eligibility rules to claim back wfh tax relief for the 2022-2023 tax year have changed. You will be able to claim tax relief on working from home is:

your employer doesn’t have an office, or
if your job requires you to live far away from the company’s office,

If your employer has an office and/or your employment contract allows for remote working (home working or else) but includes an office as your regular place of work, you will not be able to claim this allowance.

These rules are to stay for remain for the 2023/2024 tax year.

This is significant change from previous tax years, notably 2020-2021 and 2021-2022 tax years. In previous tax years, workers could claim home worker tax relief if their employer requested them to work from home, or if they worked from home more frequently and/or if their employer didn’t pay any increase in costs linked to working from home.

A few final tips to help you claim home worker tax relief

Keep accurate records of your expenses and maintain receipts for any actual expenses claimed.
Stay informed about any changes to the tax relief schemes or new initiatives introduced by the government - tax years in the UK start on April 6th every year.
Consult a tax professional or accountant if you're unsure about your eligibility or how to claim

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Working from home 2024: HMRC tax relief explained

Many of us had to shift gears and work from home at some point throughout the pandemic. In fact, the latest numbers show that 5.6 million people went from the office to their home office (or kitchen table) at some point during 2020. Surprisingly though, only around half made applications for the working from home tax relief.

At a rate of £6 per week, HMRC working from home allowance might not sound like much. But if you were required to work from home for even just one day during the lockdowns, you could be due for a nice chunk of change in the form of tax relief.

We get it – your employer and HMRC usually handle the tax codes, benefits and financial stuff. It’s normally out of your hands and this sounds like more effort than it’s worth.

But we’re here to show you just how simple and quick it is to make a claim if you’ve been working from home, and get the working from home tax relief that’s due.

What is HMRC working from home allowance?

How to claim the working from home tax relief 2023/24, give your company a friendly nudge.

Through the working from home allowance 2023/24, HMRC offers compensation, in the form of tax relief, for the costs associated with remote employment. You know, all the extra gas and electric bills associated with running a home office, for example.

Effectively, the government reimburses the cost in the form of a tax credit for working from home.

The money is taken off your current tax bill that’s paid every month, meaning that you’ll keep slightly more of your salary. But if you wait to claim until the end of the tax year, you may receive a straight-up refund in the form of a cheque.

Working from home tax relief backdated

Most of us were required (to put it lightly) to begin remote working in March 2020, which means we’re now onto the fourth year of possible claims. If you missed out on claiming the tax rebate working from home in previous tax years, don’t worry: HMRC allows you to backdate claims. Phew!

Applying for HMRC working from home tax relief 2022-23 and the year before that (since most of us became eligible for WFH tax relief in 2020) could mean you are eligible for up to £280 in total. And just in case you’ve been working from home prior to that, it's good to know that they allow backdating for up to four years.

As well as Covid-related changes to the working from home allowance, HMRC brought in other measures such as furlough through the job retention scheme. But this all ceased in October 2021. So, the work from home allowance is now one of the only measures still in place that you can make the most of.

Now that there is no longer a government requirement to work from home, like the lockdown, only a small percentage of the UK’s workforce is actually eligible to apply for tax relief in the 2023-24 tax year. But this doesn’t mean you should miss out on previous years.

Luckily, the deadline has not yet passed to make a backdated claim for working from home tax relief 2021. HMRC has confirmed that workers have until April 2025 to claim for the tax year ending in 2021, and 2026 for this current year.

To apply for working from home tax relief, you need to follow the steps on the government’s website. There are two different times to claim: at the end of the tax year or during the tax year.

Here’s how to claim working from home tax relief 2023/24:

Check you are eligible by answering the questions on the government portal
Create a government gateway ID. To do this, you’ll need your national insurance number, alongside one of the following: recent payslip, P60 or passport
After signing in, select the date that you began working from home (note that you can put a date from a previous year and receive the tax relief together)
Simply wait for your cheque to arrive from HMRC

Another important thing to note: HMRC allows you to claim tax relief on other expenses and extra costs too, such as business travel . But they do expect receipts and documentation. In order to apply, fill out a P87 working from home form.

Woman thinking about her cat and working at home

Questions? We’ve got you covered. Here are some of the most common questions regarding tax relief for remote workers.

Can I claim working from home tax relief 2023/24 tax year?

Short answer: Yes, but beware that the eligibility criteria has changed. Even if you were able to claim during 2021, there is no guarantee that you will qualify in 2023/24.

Who is eligible for tax relief?

The main purpose of regulation around this tax relief is to prevent double claims. This means that if your employer has already paid for or reimbursed the extra costs of working from home, applying for tax relief would be slightly cheeky on top.

Moreover, you cannot have chosen to work from home, it must be a requirement. For example, if you are required under government restrictions, or there are no facilities available for you to complete your work at the office.

This applies to those claiming working from home tax relief Scotland, and working from home tax relief Wales, along with those in Northern Ireland. Unfortunately, working from home tax relief Ireland is totally different since it is not part of the UK.

Important: You don't need to work from home full time. Even one day is enough to claim for the whole year, as long as your employer required it, and it wasn't just a choice.

What can you claim the tax relief for?

As part of HMRC working from home scheme, the compensation can be claimed for extra household costs that have occurred as a result of your work. While this includes the electricity and gas bills associated with using your home as an office, tax relief also exists with regard to business phone calls, for example.

Remember that HMRC specifies that you cannot apply for expenses that affect your private life, even if there is a crossover. Unfortunately, this means no claiming for meal deals.

How much working from home tax relief to expect?

The amount of tax relief you can receive is proportionate to the tax you pay.

Basic rate taxpayers receive 20% of the £6 per week figure, which is £1.20. Across one year, this adds to £62.40.

Higher rate taxpayers also receive their equivalent tax bracket back in the form of tax relief, which is 40%. This is £2.40 per week or almost £125 per year. Finally, those who earn above £100,000 and pay an additional rate tax of 45%, are eligible for £2.70 per week, which leads to £140.40 per year.

What if it doesn’t cover the cost?

Due to the sheer number of claims processed over the past two years, it would be virtually impossible for HMRC to deliver tax relief on a case-by-case basis. This means that for most of us, £6 per week is a hard limit.

Those who would like to cover extra needs, such as money you’ve spent on uniforms, tools, or professional subscriptions have the option to do so. To do this, fill out a P87 working from home form.

In this case, evidence like receipts and other documentation is required. While keeping track of all your paper receipts may feel outdated (not to mention bad for the environment), it’s what HMRC requires to process your transactions.

Usually, it’s the finance team at your organisation that handles employee expense claims, receipt reconciliation and reimbursements. But if this isn’t the first time that you’ve found yourself picking up the slack with expense claims, it might be time to nudge your company into the 21st century.

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Never lose a receipt again

We know just how difficult it is to try and file away all of your receipts, let alone how time-consuming it is to organise them when it comes to making a claim. But why should that mean that you miss out on the tax relief that you are owed?

With Pleo’s receipt scanner , you’ll get a notification on your phone as soon as the transaction goes through the till. Simply scan your receipt there and then in order to lock it in and when you’re ready to make a claim, watch your organisational worries disappear.

And when your cheque comes in, go ahead and order that ergo chair you’ve had your eye on.

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Working From Home Tax Relief, Who Can Claim & How to Get a Rebate

The rules around working from home and tax relief have changed recently. The pandemic and WFH requirements at that time meant that eligibility for the rebate was extended to millions of employees. The rules have since changed to limit who can claim a rebate.

Our guide focuses on working from home tax relief as the rules stand for 2023 and beyond. We look at who is eligible and how to go about claiming a tax rebate.

Who Can Claim Tax Relief on Working From Home?

Eligibility on working from home tax relief depends upon your status as an employee, the year you wish to claim for, and if you chose to WFH rather than it being a requirement of your job.

During the pandemic, it was a legal requirement for many staff to work from home. Because of this, the goverment extended eligibility for tax relief to anyone who’d worked from a home office.

As this isn’t a requirement any longer, eligibility for 2022 – 23 onwards has reverted to the previous rules which only permit a claim in limited circumstances.

You can claim WFH tax relief if:-

You are performing the core aspects of your role in your home office. HMRC refers to this as “Substantive Duties” (1) , and the type of work you do at home must meet their definition. For example, if an employee working in a Plumbing business did paperwork relating to his work in a home office, this would not qualify for a tax rebate. This would not be considered “substantive duties” because it’s not a core part of their role.
You need proper facilities to perform your work, and these are not available from your employer . This could be because your employer does not have enough office space for all staff. It could also be due to your home location being too physically distant from your employer for you to travel to work. For example, you live in Glasgow and your employer’s office is in Bristol.
You have not chosen to work outwith your employers office. This is an important distinction. Working from a home office must be a requirement rather than a choice.

This means that if you have chosen to ask to work from home via a flexible working request , you will not qualify for this rebate.

Can the Self Employed Claim WFH Tax Relief?

The self employed can’t claim WFH tax relief, the rebate is limited to employees. The self employed should claim their expenses via their self assessment return.

The annual HMRC self assessment is where claims can be made for expenses and costs incurred.

How to Claim Tax Relief for Working from Home

The process for claiming tax relief for working from home is fairly straightforward. You can easily apply for the rebate yourself.

Claims for working from home tax relief can be made online using the dedicated HMRC Portal . You sneed to set up a personal account through the gateway portal.

You should have your national insurance number, passport number, payslip or your P60 form available in order to provide the correct information to support your claim.

Once you have set up your personal account, you can log in and start claiming your tax relief. You need to enter the date you started working from home and confirm which tax year you’re claiming for.

You can also apply via post using a P87 form . If you work more than 5 jobs, you must use the postal process to apply. You can get the form you need directly from the HMRC website.

It is also possible to apply by telephone under certain circumstances but it is far easier to use the online portal whenever possible.

What Expenses Can You Claim For?

There is a specific list of expenses that can be claimed via working from home tax relief.

Only those employed and paying taxes are eligible to apply for these rebates. You can only claim for things that help you do your job.

You can claim for the following expenses:-

Electricity
Work related phone calls.
Internet access
Work equipment
Home contents insurance.

How Much is The Tax Rebate?

The amount you can claim in tax rebate will depend on how much income tax you pay. The basic flat rate you can claim is £6 per week.

It can be broken up into the following brackets:

Basic Taxpayers: £1.20 per week (20% of £6 = £62.40 per tax year).
Higher rate Taxpayers: £2.40 per week (40% of £6 = £124.80 per tax year).
Top rate Taxpayers: £2.70 per week (45% of £6 = £140.40 per tax year).

How is the Tax Rebate Paid?

If you are backdating your claim then it is likely you will receive a cheque directly from HMRC once it has been processed.

Should you be claiming on the current tax year, then you will simply pay less tax once you are paid. This will also change your tax code.

Can Claims for Home Working Expenses be Backdated?

You can backdate claims for home working expenses for up to 4 years.

The deadlines for the backdated home working expenses claim are as follows:

2021 / 2022 tax year – apply by 5th April 2026.
2020 / 2021 tax year – apply by 5th April 2025.
2019 / 2020 tax year – apply by 5th April 2024.
2018 / 2019 tax year – apply by 5th April 2023.

The online portal remains open for these requests. For these claims, you will receive a cheque from HMRC, potentially up to £280.

Since it is now not a legal requirement to work from home, many workers that were eligible during covid are no longer able to claim.

Other Employment Expenses that are Eligible for Tax Rebates

Bear in mind that there are some other employment expenses that are also eligible for tax rebates.

In some instances, you may be able to claim tax relief on:

Work uniforms .
Work related mileage.
Professional fees.
Subscriptions.
Tools and equipment.

The same HMRC form can be used to claim for these employment related expenses. Our guide on the P87 Form has more information on the expenses that are eligible for rebates.

You can still claim tax relief for working from home but the rules have changed since the pandemic. Not everyone is now eligible and must fit strict criteria.

To claim for the tax year 2020 to 2021 you have until 5th April 2025 and to claim for 2021 to 2022 you have until 5th April 2026.

Kirsty McCubbin

Kirsty McCubbin is the editor at safeworkers.co.uk. She has 20 years of experience owning & running online and offline businesses in the UK and Australia. Her interest in workers' rights was sparked while studying industrial history at Stirling University. Graduating in 1998, her studies fuelled a deep interest in the evolution of the laws that support safe and fair workplaces in the UK. Kirsty undertook postgraduate studies in Business Management at Napier.

Tax relief and homeworking – What you need to know for 2022-23

Home > Latest News > Tax relief and homeworking – What you need to know for 2022-23

Whilst the Coronavirus pandemic prompted a sharp rise in the number of employees working from home, tax relief for homeworking has been available since 2003.

The relief, or homeworking allowance as it is sometimes otherwise referred to, is meant to cover the additional costs associated with working from your home – i.e., heating, lighting, and water.

The Government made a number of Coronavirus-specific concessions to the usual rules, during the first lockdown in 2020, which enabled employees who had been told to work from home by their employer, or who were doing so as a result of the guidance on self-isolation, to make claims.

Employer reimbursement vs. Employee claims tax relief

Employees may obtain this relief by way of employer reimbursement or by claiming the amount themselves, from HM Revenue & Customs (HMRC).

An employer can choose to make a tax-free, fixed weekly (£6/week for weekly paid employees) or monthly (£26/month for monthly paid employees) payment, to cover ‘reasonable’ additional costs associated with homeworking.

Employers need not justify these amounts, and employees are not required to keep records in this instance.

If the fixed amounts are not appropriate, larger tax-free amounts can be paid by the employer by way of either a ‘scale-rate’ payment or by reimbursing actual costs incurred by the employee, subject to provision of evidence.

Alternatively, where reimbursement is not offered by the employer, the employee would need to submit a claim to HMRC for the fixed weekly or monthly amount to be deducted from their taxable income. Any claims made by an employee must meet the necessary conditions.

Tax relief will only ever be granted on costs incurred wholly, exclusively, and necessarilyfor the employee’s work, and a home would only be considered to be a workplace where:

The employee performs substantive duties from their home – i.e., those that form all or part of the central duties of their employment.
The duties of their employment require the use of facilities that are not available at the employer’s premises, or it is unreasonable to expect them to travel to the employers premises each day as a result of where they are living.
At no time before or after the employment contract is drawn up is the employee able to choose between working at the employer’s premises or elsewhere.

Be aware of ‘time-limited easement’ and eligibility

As aforementioned, the Government relaxed the rules for 2020-21 and 2021-22 to grant eligibility to any employee working from home regularly, for all or part of their time due to Coronavirus, so long as this was not by choice.

In other words, working from home needs to have been ‘mandated’ at one time or another, by the employer.

Thanks to a temporary microservice launched by HMRC, employees were able to claim relief for a full tax year , even if they had only worked from home for one day in that tax year, as a result of the pandemic.

Since Coronavirus restrictions have now been lifted our understanding is that the rules surrounding eligibility have returned to those in place pre-pandemic.

Whilst the microservice will remain in place for 2022-23, it is likely that many people who claimed for the previous two tax years will not be eligible to claim for the tax year commencing 6 April 2022 – for example, those now considered to be hybrid workers.

The Government’s ‘time-limited easement’, which is what allows an employee to claim relief for a full tax year even if they only meet the necessary pre-pandemic tests for part of the tax year, will end on 5 April 2023.

How can George Hay help?

If you are an employer, it may be worth taking time to reconsider whether your employees remain eligible to be reimbursed now that Coronavirus-specific concessions no longer apply and, indeed, whether their contracts substantiate the requirement for them to work from home to support payments received or claims made.

If you need advice on this or any other tax or accounting-related query, contact us today.

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Tax Tips for Employees Who Work at Home

Since the 2018 tax reform, at-home expense deductions for employees have been reduced but remain for self-employed workers.

Can you claim work from home tax deductions?

Who can claim tax deductions when working from home, tax tip 1: deduct home office expenses if you only worked for yourself or worked for yourself in addition to a w-2 job., tax tip 2: keep thorough records and save receipts., tax tip 3: consider the simplified home office deduction to ease your record keeping., tax tip 4: consider taking the direct method if it provides a bigger deduction., tax tip 5: each year you can switch between the simplified and direct method to take the biggest tax deduction., how do you calculate the home office deduction as a self-employed person, can i use the same space for my w-2 job and side gig and still claim the deduction, the best of both work worlds.

asian man working on his laptop with a dog

Key Takeaways

Employees who work from home can no longer claim tax deductions for their unreimbursed employee expenses or home office costs on their federal tax return.
Prior to the 2018 tax reform, employees could claim these expenses as an itemized deduction.
Self-employed workers can claim eligible deductions for business expenses and for working out of a home office.
You can choose between two methods for calculating your business use of home tax deductions, the simplified and direct methods.

If you’re an employee, you can claim certain job-related expenses as a tax deduction, but only for tax years prior to 2018. For tax year 2018 and on, unreimbursed expenses and home office tax deductions are typically no longer available to employees.

The number of employees working from home has grown considerably due to the COVID-19 pandemic. Just a few years ago, these employees may have been eligible for tax deductions that were unavailable to in-office employees. Now, with only a few exceptions, only self-employed people are eligible to claim tax deductions when working from home.

Before you claim these deductions, be sure you meet the IRS’ criteria, or you could face additional taxes or penalties.

Since the 2018 tax reform became law, generally only self-employed people can claim tax deductions when working from home. Working as an employee and for yourself doesn’t necessarily disqualify you from taking these tax deductions. The deductions have to be related to your self-employed income rather than your employee work.

Even in this situation, you’ll generally need to make sure your home office is only in support of your self-employment and not your job as an employee. For other expenses such as phone and Internet, you can split these between working for yourself, as an employee or as a personal expense. For deducting home office space on your tax return, the IRS requires these expenses to be used exclusively for your self-employed business.

To claim a home office as a business expense, you must use part of your home as your principal place of business or a place where you regularly meet greeting clients or customers or store inventory. If your home office is a separate structure then it does no have to be your principal place of business.

To understand more about how you can claim tax deductions when working from home, take a look at the following tax tips for employees.

Many employees work from home because it's convenient for their employer. For example, a salesperson who lives in a different state than company headquarters, may work from home rather than the company paying for office space.

If you only worked as an employee during the tax year, you can't typically claim home office expenses related to your work. If, however, you worked for yourself in some capacity, you might be able to deduct home office expenses.

If your home office is used exclusively and regularly for your self-employment, you may be able to deduct a portion of your home-related expenses, such as mortgage interest, property taxes, homeowners insurance, and utilities. You do not have to meet the exclusive use test if you claim the deduction for using your home as a daycare facility.

You need to keep accurate records of any expenses you claim as a deduction. The IRS recommends keeping a written record or log book in the event any questions arise about your deductions.

You should also save proof of payment for any tax-related expenditures. This proof may be in the form of a credit card or bank statement, canceled check, or itemized receipt. If you paid in cash, the receipt should include the payee's name, the date of the payment, and the amount. Digital records will usually satisfy this requirement as long as you can retrieve them when needed.

TurboTax Tip: Keep copies of all tax-related items and documents for at least three years. This includes receipts, invoices, tax forms, and any other supporting documentation.

When eligible to claim the home office deduction on your taxes, you have two ways of claiming the deduction: the simplified method and the direct method.

The simplified method is just that: simple. You can use this method to determine your home office deduction on your return by expensing $5 per square foot of your office, up to 300 square feet for a maximum of $1,500. The other option, the direct method, is more involved but could result in a bigger deduction.

The other way to claim the home office deduction is by using the direct method. This involves tracking all of your home office expenses in addition to any costs related to repairing and maintaining the space. Further, you can claim deductions for a portion of other expenses based on the proportion of the space to the rest of your residence.

To get the biggest deduction possible, you may need to calculate your deduction using both the direct and simplified methods to see which one comes out ahead for your taxes.

You don’t need any reason to switch from one method to the other year-to-year.

Calculating the home office deduction under the simplified method is straightforward. You take the square footage of your home office used exclusively for your self-employed business and multiply it by $5 per square foot up to a maximum of $1,500 per year.

The direct method, by comparison, requires more work on your part throughout the year and when preparing your return. But, it may also save you more on your taxes.

The direct method determines the home office tax deduction based on the percentage of your home office square footage to your entire home.

Divide the square footage of your home office by the square footage of your entire living space to calculate the percentage of your home that is dedicated to your home office. This percentage is then applied to your home expenses to determine what amount might be a business expense.

You can claim a percentage of expenses such as rent, mortgage interest, utilities, insurance, and repairs. Depreciation is also an allowable expense for a home that you own.

For example, if your office is 250 square feet and your home is 1,000 square feet, you'd deduct 25% of your allowable expenses (250/1,000 = 0.25). If you had $10,000 in eligible home-related expenses, you could claim up to $2,500 in deductions.

The direct method has no maximum deduction limit, making it more attractive in some instances than the simplified method. You may consider calculating both methods to help determine which method is best for your situation.

When using the direct method, you also need to account for depreciation of a portion of the house if you own it. You don't need to worry about calculating this when using the simplified method for taking the home office tax deduction.

If you use your home office for your W-2 job and your side gigs, you won’t be able to claim your home office as a tax deduction.

The IRS allows you to deduct expenses for having a dedicated space where you regularly and exclusively conduct your self-employed business. This is true whether you live in a house, apartment, condo, mobile home or boat, as well as external structures like a barn, garage or workshop.

If you have separate spaces for your employee job and for your self-employment work, then the eligible expenses for your self-employment space can still be deductible even though the expenses for your employee space isn't.

One option for employees who must pay for business expenses related to working at home, is to seek reimbursement from your employer. Reimbursements are typically tax-free as long as your employer has an accountable plan. This means they require you to submit an expense report or some other means of accounting for your expenses. Being reimbursed for an expense is almost always better than taking a deduction for the same expense on your taxes.

With TurboTax Live Full Service , a local expert matched to your unique situation will do your taxes for you start to finish. Or, get unlimited help and advice from tax experts while you do your taxes with TurboTax Live Assisted . And if you want to file your own taxes, you can still feel confident you'll do them right with TurboTax as we guide you step by step. No matter which way you file, we guarantee 100% accuracy and your maximum refund.

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The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

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Working from Home Tax Relief – what you need to know

Homeworking has become the norm for millions of people following the pandemic. But the rules on claiming tax relief for additional household costs you incur when working from home have changed. So read on to find out if you’re still eligible to claim up to £140 per year and whether can you still backdate your claim.

What is the Working from Home Allowance?

The government introduced working from home tax relief in 2003 to allow for anyone working from home to claim back some tax to help cover the increased household costs associated. This used to add up to a £4 a week tax-free sum.

However, because the pandemic forced millions more people to work from home, the government upped the amount to £6 a week. And the rules were also temporarily changed so you didn’t need to prove that you worked from home regularly. Instead, it meant you could claim up to £140 per year even if you only worked from home for one day.

But with all covid-related financial measures now removed, millions of workers are now back in the office either full time or part time. And in response, HMRC has updated its guidance for the 2022-23 tax year and introduced criteria that makes it harder to get a tax rebate for working from home.

Working from home? See if a garden room could help you create the perfect home office.

Working from home tax relief: What has changed?

The eligibility criteria for the working from home tax rebate is different depending on which tax year you are claiming for.

For the 2020-2021 and 2021-2022 tax years you’ll need to meet the following criteria to be eligible for working from home tax relief. You can claim for these tax years if:

Your employer told you to work from home.
Your household costs increased because of working from home.
And your employer did not pay you expenses to cover the extra costs associated with working from home.

You can backdate claims for the working from home allowance, so there is still time to claim for both the 2020-21 tax year and the 2021-22 tax year.

However for the 2022 – 2023 tax year the working from home tax relief eligibility rules have changed. The new rules state you can’t claim tax relief if you ‘choose to work from home’. This includes if your contract lets you work from home some or all of the time, if you work from home because of Covid or if your employer has an office, but you cannot go there sometimes because it’s full.

But some people will still be able to make a claim with the HMRC working from home allowance applying if your job requires you to live far away from your office. Or if your employer doesn’t have an office.

You can’t claim working from home tax relief if you are self-employed . Instead, though you can include some expenses on your tax return.

Need an independent financial adviser or tax advice? Find a local adviser and book your free initial consultation through our partners at Unbiased.

You don’t have to make life’s big financial decisions alone. Get the right IFA for you today with our partners at Unbiased.

How to apply for the working from home allowance

HMRC have set up a specific online portal where you can claim working from home tax relief. You can find it at www.gov.uk/tax-relief-for-employees/working-at-home .

The portal starts off by asking you a series of question to check you are eligible for the working from home allowance. And it states clearly that different eligibility criteria apply to different tax years.

After that you will need your Government Gateway user ID and password to make your claim. If you don’t already have a user ID, it takes a few minutes to create one.

Once you’ve logged in, you need to give the date of when you started working from home. If this was the start of the first lockdown back in 2020, the date will be 23 March 2020. You can then claim the working from home tax allowance for the entire 2020-21 tax year plus the two weeks before. This is because the new tax year starts on 6 April, but lockdown started on 23 March. You can also claim for the 2021-22 tax year at the same time and the 2022-2023 tax year if applicable.

If you pay your tax via self-assessment, you can’t claim the working from home allowance through the portal. Instead, you’ll need to apply via your tax return.

How much tax relief can I claim?

The working from home allowance is designed to cover the extra costs you incur when you work from home rather than heading off to the office. It can be tricky working out exactly how much of your heating or electricity bill is associated with the time you were at your desk so there is essentially a flat rate of £6 a week you can claim.

You can get this payment in two ways:

Your employer can pay it : You can get an extra £6 a week tax-free through your salary.
You can claim tax relief on it from HMRC : If your employer won’t pay you the allowance, but you have or had extra unavoidable costs due to working from home, you can deduct the amount from your taxable income. You then claim tax relief on it from HMRC.

Tax relief on £6 a week adds up to:

£1.20 a week for basic rate taxpayers, or £62.40 a year
£2.40 a week for higher rate taxpayers, or £124.80 a year
£2.70 a week for additional rate taxpayers, or £140.40 a year

If your home working costs add up to more than £6 a week you can claim tax relief for a larger amount. However, you will have to provide evidence to the taxman of what your costs were, such as receipts, bills or contracts. You must also prove these costs were directly connected to your employer’s requirement for you to work from home.

Need help with your tax return? Find an accountant and book your free initial consultation through our partners at Unbiased.

What can I claim working from home tax relief for?

You can only claim for things to do with your work, such as:

business phone calls
gas and electricity for your work area

If you need an accountant to help with your tax return, our partners at Unbiased can match you with the right adviser .

Can I still make a backdated claim?

HMRC says it will continue to accept backdated claims for people who have not yet claimed stating that taxpayers will receive a ‘lump sum payment’ for any successful backdated claims. It also stated that taxpayers have until the 5 April 2025 to make claims for 2020-21 tax year, and until 5 April 2026 make claims for 2021-22.

If you want to make a backdated claim you can do this via HMRC’s Working from Home Allowance portal.

How will I get the money?

If you are claiming for 2022-2023 tax year HMRC will adjust your tax code, and you’ll receive the tax relief through your salary.

And tax experts are urging employees who have previously made a claim to check their PAYE tax codes because if HMRC has included the relief and you are no longer eligible then you could get a surprise tax bill.

With more than 27,000 regulated financial advisers, our partners at Unbiased can match you with the right adviser. Find a financial adviser today.

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Personal tax

Working from home? Customers may be eligible to claim tax relief in 2021 to 2022

More than half a million people have claimed the working from home tax relief this tax year and are already benefitting.

HM Revenue and Customs ( HMRC ) is accepting tax relief claims for working from home due to coronavirus during 2021 to 2022. More than 550,000 employed workers have already claimed and are benefitting from the tax relief.

If employed workers were told to work at home by their employer because of coronavirus and, as a result, their household costs have increased, they are eligible to claim the working from home tax relief. It is quick and easy to claim via HMRC ’s online portal.

HMRC received more than 3 million claims for the tax relief for the 2020 to 2021 tax year.

Taxpayers can check if they are eligible on GOV.UK.

Myrtle Lloyd , HMRC ’s Director General for Customer Services, said:

Half a million people have already reduced their Income Tax this year by up to £125, by claiming tax relief on their working from home expenses. We want everyone who’s eligible to benefit, so we’ve made it quick and easy to do online. Check if you’re eligible and apply at GOV.UK by searching ‘working from home tax relief’. HMRC is continuing to help and support people affected by the pandemic.

From 6 April 2020, the amount employers have been able to pay tax-free without employees having to provide evidence of an increased bill is up to £6 a week. Employees who have not received the working from home expenses payment direct from their employer can apply to receive the tax relief from HMRC .

Eligible customers can claim tax relief based on the rate at which they pay tax. For example, if an employed worker pays the 20% basic rate of tax and claims tax relief on £6 a week, they would receive £1.20 a week in tax relief (20% of £6 a week) towards the cost of their household bills.

Higher rate taxpayers would receive £2.40 a week (40% of £6 a week). Over the course of the year, this could mean customers can reduce the tax they pay by £62.40 or £124.80 respectively.

To claim for tax relief for working from home, employees can apply directly via GOV.UK for free. Once their application has been approved, the online portal will adjust their tax code for the 2021 to 2022 tax year. They will receive the tax relief directly through their salary until March 2022.

If employees were required to work from home last year but did not claim for the tax relief, they have not missed out; HMRC will accept backdated claims for up to 4 years. They will receive a lump sum payment for any successful backdated claims.

Using the GOV.UK service is quick and free, and customers will receive 100% of the tax relief that is due. Agents will not be able to use the online portal to apply for the relief on a customer’s behalf.

Further information

The number of claims made in 2021 to 2022 is 558,764, as at 9 May 2021, and refers to online portal claims only.

Find out more about claiming tax relief on work related expenses .

See the online portal for working from home expenses .

Since 6 April 2003, employers have been able to make tax free payments to meet or reimburse additional household costs to employees who work at home under homeworking arrangements.

Employees do not need to provide evidence to show their bills have increased unless they are applying for tax relief on costs above the £6 per week flat rate; then evidence of the increased costs may be required.

Employees will receive the tax relief that corresponds with the Income Tax rate that they pay. For example, it will differ in Scotland.

If an employed worker completes an annual tax return, they should apply for the tax relief via their Self Assessment.

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Working from home: HMRC’s £125 tax break now harder to claim

As Covid crisis eases, official guidance says people cannot obtain relief if they choose to avoid office

A popular tax break for working from home that gave many people’s finances a small boost during the pandemic has become harder to claim, and most employees will no longer be eligible.

With millions of people back in the office for at least part of the week, experts say you can now claim tax relief for working from home only if you meet strict conditions.

Some commentators are urging employees to check their PAYE tax codes, because if HM Revenue and Customs has included the relief when you are no longer eligible you could potentially end up with a surprise tax bill.

But one bit of good news is that if you were required to work from home but did not get round to claiming, it is not too late. You can still claim for previous years.

Tax relief linked to working from home predates the pandemic – it was introduced almost 20 years ago. However, in 2020 the government relaxed the rules, which meant suddenly millions of people who were forced to work from home during lockdowns were able to claim tax relief worth up to £125 a year.

In autumn 2020, HMRC launched an online portal for employees to make a claim without having to provide receipts or do complicated calculations. And, to make things even easier, eligible workers could claim a full year’s entitlement even if they had to work from home for only one day during the tax year.

Perhaps unsurprisingly, it has been a popular tax break. Millions of people have successfully claimed it, sending the bill for the relief soaring from about £2m a year before the Covid crisis to nearly £500m over the two years of the pandemic, according to reports .Some people were probably expecting they could just claim again.

The tax relief was offered to workers provided they were told by their employer, rather than chose, to work from home, and provided they did not receive home expenses payments from their company.

Once the application was approved, the portal adjusted the individual’s tax code, and they received the tax relief directly through their salary.

Your claim was based on the assumption that you incurred costs of £6 a week while working from home, so you got back the tax that you would have paid on that sum.

For basic-rate taxpayers the relief was worth 20% of the £6: £1.20 a week. Higher-rate taxpayers could claim 40% of the £6: £2.40 a week.

Over the course of the year, this meant people could reduce the tax they paid by £62.40 or £124.80 respectively.

The relief relates to household costs such as gas and electricity, metered water and business phone calls, though under the rules, you can’t claim for the whole bill, “just the part that relates to your work”.

Tax experts say the rules have not changed. Instead the gradual easing of Covid restrictions means that most people’s circumstances have. As a result, HMRC has updated the guidance to make clear that you cannot claim the relief if there is an element of choice in your working from home.

Joanne Walker, a technical officer at the Low Incomes Tax Reform Group, says the rules were relaxed for 2020-21 and 2021-22 in favour of employees, but as of April this year, HMRC was following the rules fully again.

She says that, as before Covid, people can now only claim the tax relief if they met the conditions set out in HMRC’s Employment Income Manual 32760 . These rules are quite strict: for example, it must generally be the case that no facilities for doing your work are available to you on your company’s premises.

Robert Salter, a client tax director at accountants Blick Rothenberg, said recently that employees should check their tax codes to see if HMRC has included the relief. “If this is the case, unless they are still eligible for the relief in 2022-23, they should contact HMRC to get the notice of coding corrected. Otherwise they will have additional tax to pay at the end of the tax year,” he said.

He added that the work-from-home relief was available from 6 April 2022 onwards only if your employer specifically required you to work from home – for example, to stop the spread of Covid or because your job had been “relocated” and was now contractually regarded 100% as a home-working role.

“If, for example, your employer simply now allows staff to work flexibly – ie, being in the office or working from home as it suits each individual – the home office relief ceases to be available for the 2022-23 tax year.”

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Working from home: Homeworking rates and allowances

What tax-free allowances are there for working from home? What allowances can be paid to homeworking employees?

This is a freeview 'At a glance' guide to to homeworking rates and allowances.

At a glance

Fixed rates for homeworking are agreed by HMRC: these amounts can be paid by employers to their homeworking employees to reimburse them for the additional costs of things such as light and heat used when homeworking.

Alternatively, employees may be able to claim actual costs of homeworking if wholly, exclusively and necessarily incurred or in job-related accommodation. See Working from home: employer/employee

These are the maximum amounts that may be paid by an employer, without requiring a receipt, or evidence of expenditure by the employee.

If higher amounts are paid these need to be evidenced by receipts, and the employer must disclose amounts reimbursed on form P11D, unless they are approved under the Exemption for paid and reimbursed expenses .

The COVID-19 Homeworking exemption to Income Tax and National Insurance Contributions (NICs) where the employer reimbursed home office equipment expenditure was extended until 5 April 2022 and ceased to apply thereafter.

HMRC has provided guidance for employees who are homeworking due to the coronavirus crisis, see COVID-19: Working from home .

Thousands of accountants and advisers and their clients use www.rossmartin.co.uk as their primary TAX resource.

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Claiming tax relief for homeworking expenses.

Tax relief for household expenses is permitted where it is demonstrated that the expense has been incurred wholly, exclusively and necessarily in the performance of the duties of the employment. HMRC accepts that those conditions are met where the following circumstances all apply:

the duties that the employee performs at home are substantive duties of the employment. “Substantive duties” are duties that an employee has to carry out and that represent all or part of the central duties of the employment.
those duties cannot be performed without the use of appropriate facilities.
no such appropriate facilities are available to the employee on the employer’s premises (or the nature of the job requires the employee to live so far from the employer’s premises that it is unreasonable to expect them to travel to those premises on a daily basis).
at no time either before or after the employment contract is drawn up is the employee able to choose between working at the employer’s premises or elsewhere.

These conditions are very restrictive and will only apply in limited circumstances. Individuals working from home under agreed home working arrangements including an element of personal choice are unlikely to be able to claim the relief.

Where relief is available this is a claim that an individual makes directly with HMRC and cannot be made multiple times if the person holds more than one job. If the conditions are met, the individual may claim relief on £26 per month without having to provide evidence of additional costs. If costs are incurred above this level, additional relief may be claimed subject to having appropriate evidence, e.g., bills, receipts.

Click here to view the process for claiming relief.

The Netherlands' Home Working Allowance In 2023

Updated January 2023

Home working practices are well established in the Netherlands. In fact, close to 20% of Dutch employees regularly worked from home before the COVID-19 crisis and a member survey of the Dutch Employer’s Organisation AWVN shows that many are convinced that home working will continue long after COVID.

As an employer, it is important to ensure that your employees can work as productively and comfortably from home as in the office. Today, employers in the Netherlands can already provide their workers with a tax-free allowance to set up their home office space thanks to the 'vrije ruimte' in the Werkkostenregeling.

As of 2022 , a separate home working allowance can be added to cover the additional daily cost of working from home. This home working allowance is of € 2.15 per day in 2023 . But what does this mean for your administration, your expense policy and your employees? Read on to learn all about the home working allowance in the Netherlands.

The benefits of working from home

Home working is here to stay , for multiple reasons. Over the duration of the pandemic, employers and employees have both noted that working from home hasn’t led to major disturbances in productivity and, on the contrary, comes with a number of benefits. The benefits of working from home include:

Fewer car trips, a net benefit to the environment
Less time wasted in commuter traffic
The ability to balance private matters with work while at home
More efficient meetings
Fewer distractions, meaning more room for deep work.

Of course, not everything is perfect when working from home. For example, “fewer distractions” only applies to people without parallel family commitments or with the means to afford independent childcare.

Besides, work is also a social activity, the importance of which cannot be underestimated. In a fully remote context, brainstorming over a coffee or getting a quick consult in the hallway becomes virtually (pun not intended!) impossible.

Which is why it’s important for businesses that rely on these informal meetings to include time and space for interaction to happen online. This can be through short daily meetings or longer weekly Zoom calls, anything that can help maintain a certain group dynamic.

It is likely that office work will continue to evolve towards a hybrid setup combining the best of both worlds. Regardless, home working is now permanently a part of the equation.

What does the home working allowance entail?

Working from home does mean additional expenses for your employees. Things like a higher electrical or utility bill, extra bandwidth to accommodate multiple Zoom calls in parallel, or even just coffee beans and garbage bags. All items that would normally be covered by their employer if they were spending their days in the office. Which is why the Cabinet decided on a specific home working allowance for 2022.

This home working allowance took effect on January 1st, 2022. It allows employers to provide a maximum of € 2.15 per day and per employee as tax-free compensation for the additional costs related to home workin g . While it may not seem much, this allowance does add up to close to 500 euros per year for full-time employees.

With this allowance, employers can reimburse these costs without having to deduct payroll taxes or make additional social security contributions.

Travel allowance and home working allowance?

An important rule to include in your expense policy is that you cannot grant employees both a travel allowance and a home working allowance for the same day. This makes sense: if an employee is working from home for the day and being compensated for it, he or she cannot simultaneously claim an allowance for commuting that day.

Is the home working allowance compulsory?

No, employers can decide for themselves whether or not to grant their employees a home working allowance. However, as an employer it is a relatively low cost way of keeping your workers satisfied and giving them a little extra. Whatever you decide to do, be transparent and include your decision in your expense policy . Your employees will appreciate it.

What about the administrative processing?

Broadly speaking, there are two ways to pay this allowance.

You can sum up the allowance for the number of days in each pay period and pay it out monthly.
Or you can give employees a fixed allowance per month based on the average number of days they work from home.

While you could keep track of your employees' home working days in an Excel sheet, it’s much easier to use an automated solution like Mobilexpense . Mobilexpense is a digital expense app that covers all the regulatory requirements of the Dutch market. Our experts are ready to help you implement the home working allowance in your solution.

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Latest Proposals of Adhoc Relief Allowance 2023
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Clarification regarding adhoc relief Allowances and special allowance
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COMMENTS

Claim tax relief for your job expenses
How much you can claim. You can either claim tax relief on: £6 a week from 6 April 2020 - you will not need to keep evidence of your extra costs. the exact amount of extra costs you've incurred ...
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For example, if you have a 300-square-foot home office (the maximum size allowed for this method), and you work from home for three months (25% of the year), your deduction is $375 ( (300 x $5) x ...
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2023 and 2024 Work From Home Tax Deductions. The 2017 tax reform law ended the ability for most taxpayers to deduct expenses for working from home just in time for millions more people to begin working from in response to the Covid pandemic. Nowadays only a few select groups of salaried home-based workers can still deduct relevant expenses.
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If you do claim yourself, how much you will get depends on the rate of income tax you pay: Basic-rate taxpayers get £1.20 a week (tax relief of 20% on £6) = £62.40 per tax year. Higher-rate ...
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You can claim a flat rate of £6 a week from 2020-21 onwards, or £4 a week for previous tax years. If you're a basic-rate taxpayer and claim tax relief on £6 a week, you'll receive the tax you paid on this amount: 20% of £6 is £1.20, which is around £62 per year.
Working from home tax relief claims for 2022/23
Published: 18 Jan 2023 Update History . ... a claim cannot be made where the allowance (or reimbursement of evidenced amounts incurred) is paid to the employee by their employer, which would be tax-free under s316A, ITEPA 2003, see HMRC's guidance Expenses & benefits: homeworking. The Tax Faculty.
Our Complete Guide To Work From Home Tax Relief in the UK
This means that if you're on the basic taxpayer rate of 20% and claim back £6 of working from home tax relief, you'll get £1.20 per week back. Per year, the tax relief adds up to: £1.20 a week for basic rate taxpayers, or £62.40 a year. £2.40 a week for higher rate taxpayers, or £124.80 a year. £2.70 a week for additional rate ...
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Many of us had to shift gears and work from home at some point throughout the pandemic. In fact, the latest numbers show that 5.6 million people went from the office to their home office (or kitchen table) at some point during 2020. Surprisingly though, only around half made applications for the working from home tax relief.. At a rate of £6 per week, HMRC working from home allowance might ...
54,800 customers claim tax relief for working from home
13 October 2020. HM Revenue and Customs ( HMRC) has received more than 54,800 claims from customers using a new online portal which allows workers to claim tax relief for working at home. Launched ...
Working From Home Tax Relief
You can backdate claims for home working expenses for up to 4 years. The deadlines for the backdated home working expenses claim are as follows: 2021 / 2022 tax year - apply by 5th April 2026. 2020 / 2021 tax year - apply by 5th April 2025. 2019 / 2020 tax year - apply by 5th April 2024. 2018 / 2019 tax year - apply by 5th April 2023.
Tax relief and homeworking
The relief, or homeworking allowance as it is sometimes otherwise referred to, is meant to cover the additional costs associated with working from your home - i.e., heating, lighting, and water. ... will end on 5 April 2023. How can George Hay help? If you are an employer, it may be worth taking time to reconsider whether your employees ...
Tax Tips for Employees Who Work at Home
Depreciation is also an allowable expense for a home that you own. For example, if your office is 250 square feet and your home is 1,000 square feet, you'd deduct 25% of your allowable expenses (250/1,000 = 0.25). If you had $10,000 in eligible home-related expenses, you could claim up to $2,500 in deductions.
Working From Home Tax Relief Will Remain 2022/23
30 March 2022. The CIPP has received confirmation from Her Majesty's Revenue and Customs (HMRC) that the time easement for claiming tax relief for working from home expenses will end in April 2023. The easement, that allows tax relief to be claimed for the whole tax year if someone is eligible to claim extra costs for working from home for ...
Claiming Tax Relief for Homeworking Expenses
31 May 2023. This is a follow-up to the earlier PSTAX advice in relation to claiming tax relief for working from home. Rather than an employee making a claim to HMRC, it is also possible for an employer to pay a 'homeworking allowance' to employees without giving rise to a tax/NIC liability. Unlike the tax relief claim, the exemption ...
Home Working Allowance for Employees -COVID19 update
2023/24 Tax Rates & Allowances. Wed, 07 Jun 2023. ... There are a few ways for employees to claim the home working allowance: Through a self-assessment tax return. Online/Post: If not registered for self-assessment, then an employee can use the form P87 procedure to claim this allowance. No more than £2,500 of expenses can be claimed using ...
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You can backdate claims for the working from home allowance, so there is still time to claim for both the 2020-21 tax year and the 2021-22 tax year. However for the 2022 - 2023 tax year the working from home tax relief eligibility rules have changed. The new rules state you can't claim tax relief if you 'choose to work from home'.
Working from home? Customers may be eligible to claim tax relief in
Published. 13 May 2021. HM Revenue and Customs ( HMRC) is accepting tax relief claims for working from home due to coronavirus during 2021 to 2022. More than 550,000 employed workers have already ...
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For basic-rate taxpayers the relief was worth 20% of the £6: £1.20 a week. Higher-rate taxpayers could claim 40% of the £6: £2.40 a week. Over the course of the year, this meant people could ...
Working from home: Homeworking rates and allowances
Year. Rate per week. From 6 April 2020. £6 (or £26 per month) From 6 April 2012. £4 (or £18 per month) If higher amounts are paid these need to be evidenced by receipts, and the employer must disclose amounts reimbursed on form P11D, unless they are approved under the Exemption for paid and reimbursed expenses. COVID-19.
Home Sweet Home
2024 Prospectus and 2023 Syllabus . Past papers Past exam papers. Study Support Find out how the ATT can help you with your studies. ... HMRC have advised us that claims for homeworking allowances were not rolled forward into 2022/23 and any one working at home during 2022/23 and who wants to claim tax relief will need to confirm that they meet ...
SLCC
Claiming Tax Relief for Homeworking Expenses. 24 April 2023. Tax relief for household expenses is permitted where it is demonstrated that the expense has been incurred wholly, exclusively and necessarily in the performance of the duties of the employment. HMRC accepts that those conditions are met where the following circumstances all apply:
The Netherlands' Home Working Allowance In 2023
This home working allowance took effect on January 1st, 2022. It allows employers to provide a maximum of € 2.15 per day and per employee as tax-free compensation for the additional costs related to home working. While it may not seem much, this allowance does add up to close to 500 euros per year for full-time employees.