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Home Office Tax Deduction 2023-2024: Rules, Who Qualifies

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What is the home office deduction?

Small-business owners and freelancers who regularly and exclusively use part of their home for work and business-related activities may be able to write off rent, utilities, real estate taxes, repairs, maintenance and other related expenses. The home office tax deduction can be taken on Schedule C of Form 1040 (annual tax return).

» Need to back up? How tax deductions and write-offs work

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How does the home office tax deduction work in 2023-2024?

You can claim the deduction whether you’re a homeowner or a renter, and you can use the deduction for any type of home where you reside: a single-family home, an apartment, a condo or a houseboat. You can’t use it for a hotel or other temporary lodging. Here are the other conditions you’ll need to meet:

Regular and exclusive use

The space you’re using for business must be used exclusively for conducting business. For example, using a spare bedroom as both your office and a playroom for your children probably makes you ineligible.

There are two exceptions. If you provide day care services for children, older adults (65 or above) or handicapped individuals in that part of the house, you can probably still claim business deductions as long as you have a license, certification or approval as a day care center under state law, according to the IRS [0] Internal Revenue Service . Publication 587: Business Use of Your Home . Accessed Feb 20, 2024. View all sources . The other exception is if you use the office for storage of inventory or product samples you sell in your business.

Principal place of business

Although your home office doesn’t have to be the only place you meet your clients or customers, it must be your principal place of business. That means you use the space exclusively and regularly for administrative or management activities, such as billing customers, setting up appointments and keeping books and records, according to the IRS [0] Internal Revenue Service . Publication 587: Business Use of Your Home . Accessed Feb 20, 2024. View all sources .

Can I take the home office deduction as a work-from-home employee?

W-2 employees who work from home are not able to take the home office tax deduction. Prior to 2018, remote employees could write off some of their unreimbursed home office expenses as itemized deductions, but the Tax Cuts and Jobs of 2017 suspended this tax break until 2025 [0] Congress.gov . Tax Cuts and Jobs Act . View all sources .

If you are a freelancer, have a side hustle, or run your own business in addition to your W-2 job, you may be able to take the home office deduction. The office or space where you conduct this separate self-employed business can't be the same space where you also work as an employee, though. This line can get blurry very quickly — and there are other details to know, too. Make sure you're staying on the right side of the rules if you plan to claim this tax break.

» Need some help ? How to find a CPA near you

How to calculate your home office tax deduction

You can determine the value of your home office deduction using one of two methods:

Simplified method: With the simplified option, you aren’t deducting actual expenses. Instead, the square footage of your space is multiplied by a prescribed rate. The rate is $5 per square foot for up to 300 square feet of space.

Actual expenses method : The regular, more difficult method values your home office by measuring actual expenditures against your overall residence expenses. You can deduct mortgage interest, taxes, maintenance and repairs, insurance, utilities and other expenses. You can use Form 8829 to figure out the expenses you can deduct.

» MORE: See our picks for this year's best tax software

Simplified version vs. actual expense deduction

The choice of whether to use the simplified deduction, if you’re eligible for it, or to deduct actual expenses, depends mainly on which would net you the bigger tax deduction.

The actual expense method

If you use the actual expenses method, you can deduct direct expenses — such as painting or repairs solely in the home office — in full. Indirect expenses — mortgage interest, insurance, home utilities, real estate taxes, general home repairs — are deductible based on the percentage of your home used for business [0] Internal Revenue Service . Publication 587: Business Use of Your Home . Accessed Feb 20, 2024. View all sources .

Example: Let’s say you paid $3,000 in mortgage interest, $1,000 in insurance and $3,000 in utilities (all indirect expenses) plus $500 on a home office paint job (direct expense) during the year. Your home office takes up 300 square feet in a 2,000-square-foot home, so you may be eligible to deduct indirect expenses on 15% of your home.

That could mean a deduction of $1,050 in indirect expenses ($7,000 in expenses, multiplied by the 15% of space used in the home), plus $500 for the direct expense of painting the home office, for a total deduction of $1,550.

» MORE: Popular tax breaks and tax deductions

The simplified version

If your home office is 300 square feet or less, and you opt to take the simplified deduction, the IRS gives you a deduction of $5 per square foot of your home that is used for business, up to a maximum of $1,500 for a 300-square-foot space [0] Internal Revenue Service . How Small Business Owners Can Deduct Their Home Office From Their Taxes . Accessed Feb 20, 2024. View all sources .

In this case, using the simplified method could make more sense because you’d get only $50 more in deductions by documenting actual expenses. You should also consider the time it will take you to gather receipts and records.

The simplified method can work well for single-room offices and small operations.

The actual expenses method might work better if the business makes up a large part of the home.

Other home office deduction rules and considerations

Receipts. If you plan on deducting actual expenses, keep detailed records of all the business expenses you think you’ll deduct, such as receipts for equipment purchases, electric bills, utility bills and repairs. If you’re ever audited by the IRS, you’ll be prepared to back up your claims

Home sales. If you're a homeowner and you take the home office deduction using the actual expenses method, it could cancel out your ability to avoid capital gains tax on home sales . People who sell their primary residence after having lived in it for at least two of the five years before the sale generally don't have to pay taxes on up to $250,000 in profit on the sale, or $500,000 if married filing jointly , according to IRS Publication 523.

Depreciation. If you use the actual expenses method, you’re required to depreciate the value of your home. Depreciation refers to an income tax deduction that lets taxpayers recover the costs of property due to wear and tear, deterioration, or obsolescence of the property, according to the IRS. The depreciation you’re required to take in home office deductions is subject to capital gains tax when you sell your home. For example, if you own your home, use 20% of it as a home office and deduct depreciation, 20% of your profit on the home’s sale may be subject to capital gains tax. However, if you use the simplified method, depreciation isn't a factor and you may not be subject to the tax.

The rules on tax deductions for a home office can be hard to digest. Consider consulting with with a tax advisor or consultant or use the appropriate online tax software if you're unsure about how to proceed.

On a similar note...

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How work from home tax deductions work
Who is eligible for work from home deductions?
How to claim work from home deductions
How to calculate work from home tax deductions

WFH tax deductions explained: who qualifies and how to claim them

Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate tax products to write unbiased product reviews.

Work from home tax deductions allow self-employed people to reduce their taxable income.
W2 employees generally can not take work from home deductions.
Freelancers and gig workers generally qualify as having business income and are thus eligible for work from home deductions.
See Personal Finance Insider's picks for the best tax software .

Work from home (WFH) tax deductions are business expenses that you can subtracted from revenue to lower your tax bill. But these deductions almost exclusively apply to those who own their own businesses or have some sort of self-employment income, such as freelancers and gig workers. Regular W2 employees generally can't take these deductions, even if you switched from working in an office to working from home.

Perhaps the most prominent WFH tax deduction is the home office deduction, which allows you to reduce your taxable income based on the expense of maintaining a home office. But there can also be other deductions that apply to running a business out of your home or being an independent worker who incurs some relevant business expenses, ranging from computer equipment to retirement contributions.

How work from home tax deductions work

WFH tax deductions work by allowing those with self-employment income to offset some of their business income with relevant expenses, which are considered to be "ordinary and necessary" for their work.

According to the IRS , "an ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary."

For example, if a freelancer takes in $50,000 in a given year based on what they bill clients, but then they also have $10,000 in expenses like advertising, home office supplies, and the business use of a car, then they would only be taxed on $40,000 (aside from any other types of income, deductions or credits).

For simplicity's sake, suppose this person paid taxes at a 20% rate (actual amounts would likely differ). Instead of paying 20% of $50,000, which would be $10,000, the freelancer would pay 20% of $40,000, which equals $8,000. So, those $10,000 in WFH expenses reduce the total tax bill by $2,000 in this scenario.

Who is eligible for work from home deductions?

Because of the Tax Cuts and Jobs Act (TCJA), which came into effect during the 2018 tax year, employees are generally not eligible to take WFH deductions, even if they have significant expenses that their employers won't reimburse.

There are a few exceptions, such as for " eligible educators ," who can deduct as much as $250 in unreimbursed expenses. Otherwise, you must own your own businesses or have some sort of self-employment income such as from freelance work in order to qualify for WFH tax deductions.

"Miscellaneous itemized deductions prior to 2018 used to be claimed on Schedule A, but since the Tax Cuts and Jobs Act, those deductions really went away. So for W2 employees, it's really difficult to be able to take any kind of [work-related] deduction at all," explains Mark Witte, CPA and managing director at UHY Advisors . Previously, employees could deduct itemized expenses that totaled more than 2% of their adjusted gross income. However, the TCJA is only set to run through 2025 , so it's possible that old rules will come back into play. Some states did not follow the TCJA and still allow for taxpayers to itemize their deductions, including unreimbursed employee expenses, subject to limitations.

"Potentially, once that expires, W2 employees could take deductions again. I haven't seen anything on the horizon to speed up that deadline," adds Witte.

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How to claim work from home deductions

Claiming WFH deductions doesn't have to be complicated, especially if you use tax software or have a tax professional's help. Even if you were to file taxes manually, those with self-employment income who file Schedule C can fill in line items for different categories of expenses, such as advertising and business insurance. Use Form 8829 to calculate the allowable expenses for business use of your home.

The main thing to remember is whether an expense is ordinary and necessary for your business. Building a gym within your home office because you want to work out during the day probably wouldn't be something you could claim as it's not an ordinary and necessary expense for, say, a real estate agent or IT consultant. But buying a printer for your home office to use for work could be something that's justifiable.

Taxpayers should keep records "of any kind of potential expenses that are deemed reasonable and necessary for them to operate their business and generate their revenue," says Witte. "If they deal with a financial professional or a tax preparer, they can certainly bounce ideas off of them. They could keep a simple Excel spreadsheet, listing down all the money they spend that they think relates to the business, and then with the CPA they can hash out what qualifies, or if something has some personal use to it, then maybe they can take a piece of that expense."

How to calculate work from home tax deductions

Calculating WFH deductions can differ a bit depending on what expenses you want to deduct. One of the more prominent ones, the home office deduction, allows renters and homeowners who regularly and exclusively use part of their home as their principal place of business to reduce their taxable income based on this expense. If you used that portion of your home during just part of the year, you can only deduct expenses incurred during that time.

To calculate the home office deduction, you can use one of the following options:

Simplified option : Since tax year 2013, under the simplified option for calculating the home office deduction, you can deduct $5 per square foot used for your business, up to 300 square feet. For example, a 200-square-foot home office could potentially equal a $1,000 deduction. Other expenses related to your home, such as mortgage interest, could then be claimed in full under Schedule A, which is used for itemized deductions.

Using the regular method can also have further tax consequences down the line if you own your home and later sell it or dispose of the property. If you sell or dispose of the property at a profit, you will have to recapture the depreciation previously allowed or allowable for the portion of the home used in a qualified business, and may pay up to 25% rate in capital gains.

Other types of expenses, such as home office supplies, can be more straightforward, especially if they're exclusively for business. In these cases, you can often fully deduct the cost of the item. For example, if you spend $100 to make business cards for yourself, you can generally deduct that $100 in full.

Regardless of the method used, you may not take a home office deduction in excess of the gross income from business use of the home minus business expenses. Excess amounts may be carried forward under the regular method, and are not allowed to be carried forward under the simplified method.

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Who Qualifies for Work-From-Home Tax Deductions?

5 Min Read | Dec 21, 2023

Working from home has its perks. You can make the 20-step commute from your bedroom to your office in a little under four seconds. And pajamas are the new business casual wear.

But does working remotely have any tax advantages? What are work-from-home tax deductions or write-offs? We want you to get every deduction you deserve—so you’ll have more cash in your pocket to get out of debt, save for an emergency fund, and win with money. So let’s dig into the deets on work-from-home deductions.

Can I claim the home office tax deduction if I've been working remotely?

If your employer instituted work-from-home policies during the pandemic, you probably spent some time and money setting up a home office (the kitchen table just wasn’t going to cut it for a desk). And maybe you’ve continued working remotely some or all of the time.

Unfortunately, if you’re a salaried or hourly employee (the kind who receives a W-2 during tax season), you can’t take tax deductions for your home office . Bummer. (But grab some string cheese from the fridge next to your desk, and you’ll feel better before you know it.)

Self-Employed Independent Contractors

So who gets to take work-from-home tax deductions? Well, the IRS reserves them for self-employed independent contractors . In other words, if you work full time as a freelancer or have a side hustle that requires an office, you qualify to deduct a portion of your home’s expenses.

The IRS used to allow W-2 employees to deduct expenses related to working from home, but Congress changed that with its 2017 tax reform bill. A few very specific types of W-2 employees can still take the home office tax deduction, but we’ll talk about that in a minute.

Tax Deductions for Contractors

If you’re self-employed, you’ll probably end up receiving one or more 1099-NEC tax forms from the companies you worked for. A 1099 lists income you earned as an independent contractor so you can report it on your taxes. Don’t just toss those in a desk drawer. You’ll need them come tax time!

When you’re self-employed you often end up wearing lots of hats—accountant, HR rep, janitor. And since you don’t have an employer withholding taxes from your paycheck, it’s up to you to manage them yourself. That includes the self-employment tax , which is the full 15.3% of Social Security and Medicare taxes (an employer normally pays half of these taxes).

The best way to lower your tax bill is by claiming tax deductions . Here are 16 self-employment tax deductions to help you save money!

One of the bigger tax deductions you can take if you work from home as an independent contractor is the home office deduction. To take this deduction, you’ll need to figure out the percentage of your home used for business. Say your home office occupies 10% of your house. That mean you can deduct 10% of your utility bills (electricity, water and gas), mortgage payment or rent, property taxes, mortgage interest, homeowners insurance, repairs, and maintenance.

Home-Based Worker Exceptions

There are exceptions to every rule, right? So the small (and very specific) group of W-2 employees who can claim work-from-home tax deductions are Armed Forces reservists, certain performing artists, state or local government officials who are paid on a fee basis, people with physical or mental disabilities, and teachers. 1

If you fall into any of those groups, you’ll still need to jump through a couple of hoops before you actually get a deduction. (Yep, Uncle Sam loves to have you jump through hoops.)

Got small business tax questions? RamseyTrusted tax pros are an extension of your business.

First, the IRS only allows you to deduct expenses above 2% of your adjusted gross income. 2 So if your income is $50,000, your threshold to begin claiming expenses is $1,000.

Reaching the threshold for expenses doesn’t sound super difficult, but the second hoop is the real deal breaker. To claim expenses, you’ll need to itemize deductions . Since most W-2 employees get a lower tax bill by taking the standard deduction instead of itemizing, you’re probably just going to be out of luck if you want to claim expenses.

How to Claim Work-From-Home Tax Deductions

If you’re still reading, that must mean you’re self-employed and can claim work-from-home tax deductions. If that’s the case, you’re going to have to fill out a Schedule C . This form lists profit or loss from business, and it’s where you can deduct all of your business expenses. Hopefully your deductions will add up to a nice little chunk of change!

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23 Common Tax Deductions for Small-Business Owners

We don’t have to convince you that taxes are complicated—especially for small-business owners. But the good news is that there are plenty of small-business tax deductions available to make tax season a little less painful!

What Is a 1099-NEC?

If you’re self-employed, you’ll receive a 1099-NEC listing the income you earned as an independent contractor. Don’t toss them out. You’ll need them to file your taxes. Take a look to learn more.

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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Interior view of a bright and modern home office

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.

Working at Home

If you work from home, you need to know how to qualify for the home office deduction, pay self-employment taxes and understand which business expenses you can take deduct.

Being your own boss

Going from employee to self-employed, estimated tax payments, self-employment tax, business expenses, home office deduction, more options for retirement saving.

man holding a dog in his lap in his home office

Key Takeaways

As a self-employed individual, you’re likely required to make quarterly estimated tax payments throughout the year to cover your federal tax liability.
When you’re self-employed, you must pay both the employer and employee portions of the Social Security and Medicare taxes you owe—a total of 15.3 percent on the first $160,200 of your net earnings from self-employment in 2023. This limit increase to $168,600 for the 2024 tax year.
You typically can deduct a wide range of business expenses to lower your taxes, provided these are ordinary and necessary expenses for your business.
If you use a portion of your home "exclusively and regularly" for your business, you likely can take a deduction for a home office.

Don’t listen to the naysayers who tell you that taking the home office deduction is a red flag for an IRS audit. Congress created these tax breaks and we’ll show you how to take advantage of them.

Hard to believe, but you can get a tax break for staying in your pajamas and fuzzy bunny slippers to run your business.

Many people who leave jobs—either voluntarily or following a lay-off—choose to start their own business and work out of their homes. Once you switch from life as an employee to become an independent contractor, your tax situation also changes. Here are several things you can do to keep your tax house in order:

Your employer used to take care of withholding your income taxes from you paycheck and sending payments to the IRS. But once you're self-employed, it'll be up to you to make estimated tax payments to the IRS during the year to cover your federal tax liability. Normally you can skip making estimated tax payment if you expect to owe less than $1,000 when you do your taxes. You can use quarterly payments quarterly using Form 1040 ES or make payment online at the IRS website.

Uncle Sam takes a bigger bite out of your income, employment-tax wise, when you’re on your own. To cover your Social Security and Medicare taxes, in 2023 you'll owe Uncle Sam 15.3 percent on the first $160,200 of your net earnings from self-employment. This Social Security wage limit increases to $168,600 for the 2024 tax year.

When you net self-employment income exceeds the Social Security wage limit, you'll still owe Medicare tax of 2.9 percent and perhaps an additional 0.9 percent for the Additional Medicare Tax. The additional tax is for those making above $250,000 for married filing joint filers ($125,000 for married filing separately) while other filing status taxpayers see the additional tax when their income goes above $200,000.

But there's good news: You can deduct half of your self-employment taxes (but not the Additional Medicare Tax) when figuring adjusted gross income on your 1040. So if you're in the 25 percent federal income tax bracket, the government effectively refunds 12.5 percent of the Social Security tax you pay.

TurboTax Tip: An easy way to keep your business expenses separate from your personal expenses is to set up a separate bank account for your business and have a credit card you use only for business purchases.

Don’t throw away those receipts!

You can write off a long list of business costs—everything from business meals to insurance to bad debts—so it's important to maintain good records of those expenses to get all the tax deductions you're entitled to. And because you can't deduct personal expenses, you must be sure to keep your business expenses separate. An easy way to do this is to set up a separate bank account for your business, and have a credit card you use only for business purchases.

If you're working from home, deducting the costs associated with your home office can be a big tax saver—but the rules are tricky.

To get the deduction, the law requires you to use your home office "exclusively and regularly" for your business. It must be an area in your home where you don't mix business with other activities. In other words, the kids can’t play and you can’t watch a lot of football in the same area as your workplace. So put that big-screen TV somewhere else in the house.

The office also has to be your principal place of business or a place you meet regularly with clients or patients. What if you’re on the road a lot for business? No problem. You can qualify even if you spend most of your work time away from the office—such as a self-employed plumber who spends most of his time working at clients' homes—as long as you conduct administrative and management activities in your home office and don't use any other fixed location to do those activities. If you qualify for home office deductions, the write-offs will help pay for what would otherwise be considered personal expenses, such as part of the cost of utilities, mortgage interest, property taxes, and homeowner's insurance premiums.

Working in your pajamas is still work.

So plan now for full-time relaxation later and start a retirement plan, which is another great tax saver. And once you're self-employed, your options go far beyond an individual retirement account. Check out an SEP (Simplified Employee Pension), SIMPLE (Savings Incentive Match Plan), and Keogh as well as individual 401(k) plans. All allow you to sock away money for retirement and take a tax deduction for what you contribute.

Let a local tax expert matched to your unique situation get your taxes done 100% right with TurboTax Live Full Service . Your expert will uncover industry-specific deductions for more tax breaks and file your taxes for you. Backed by our Full Service Guarantee . You can also file taxes on your own with TurboTax Premium . We’ll search over 500 deductions and credits so you don’t miss a thing.

Investment and Self-employment taxes done right

A local expert matched to your unique situation will get your taxes done 100% right, guaranteed with TurboTax Live Full Service . Your expert will find every tax deduction you deserve & file for you as soon as today.*

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TurboTax Premium searches 500 tax deductions to get you every dollar you deserve. Your taxes done 100% right, guaranteed .

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Related articles, more in self employment taxes.

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TurboTax Online: Important Details about Filing Form 1040 Returns with Limited Credits

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Searching Money Mentor . . .

How to claim the working from home tax relief.

| Editor-at-large

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.

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

The performance of most cryptoassets can be highly volatile, with their value dropping as quickly as it can rise. You should be prepared to lose all the money you invest in cryptoassets.
The cryptoasset market is generally unregulated. There is a risk of losing money or any cryptoassets you purchase due to risks such as cyber-attacks, financial crime and firm failure.
The Financial Services Compensation Scheme (FSCS) doesn’t protect this type of investment because it’s not a ‘specified investment’ under the UK regulatory regime – in other words, this type of investment isn’t recognised as the sort of investment that the FSCS can protect. Learn more by using the FSCS investment protection checker here .
Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA regulated firm, FOS may be able to consider it. Learn more about FOS protection here .
There is no guarantee that investments in cryptoassets can be easily sold at any given time. The ability to sell a cryptoasset depends on various factors, including the supply and demand in the market at that time.
Operational failings such as technology outages, cyber-attacks and comingling of funds could cause unwanted delay and you may be unable to sell your cryptoassets at the time you want.
Investments in cryptoassets can be complex, making it difficult to understand the risks associated with the investment.
You should do your own research before investing. If something sounds too good to be true, it probably is.
Putting all your money into a single type of investment is risky. Spreading your money across different investments makes you less dependent on any one to do well.
A good rule of thumb is not to invest more than 10% of your money in high-risk investments .

If you are interested in learning more about how to protect yourself, visit the FCA’s website here

For further information about cryptoassets, visit the FCA’s website here

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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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 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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Homeworking and Tax Relief for Employees

Working from home may be an attractive option for some employees. Here we consider the tax implications of homeworking arrangements.

Your status is important

The tax rules differ considerably depending on whether you are self-employed, as a sole trader or partner, or whether you are an employee, even if that is as an employee of your own company. One way or the other though, if you want to maximise the tax position, it is essential to keep good records. If not, HMRC may seek to rectify the tax position several years down the line. This can lead to unexpected bills, including several years’ worth of tax, interest and penalties.

This factsheet considers the position for employees.

General rules

Generally, any costs paid on behalf of, or reimbursed to, an employee by their employer will be taxable. The employee will then have to claim the personal tax relief themselves and prove that they incurred those costs ‘wholly, exclusively and necessarily’ in carrying out their job. The word ‘necessarily’ creates a much tighter test than that for the self-employed.

In addition, the way in which the services are provided can sometimes make a substantial difference to that tax cost. For example, if the employer provides something for the employee, the rules are often much more generous than if the employee bought it themselves and attempted to claim the tax relief. A bit of advice and forward planning can often prove to be fruitful.

An exemption

The rules for employees in relation to ‘use of home as office’ contains a specific exemption from a tax charge. They allow payments made by employers to employees for additional household expenses to be tax free, where the employee incurs those costs in carrying out the duties of the employment under homeworking arrangements. ‘Homeworking arrangements’ means arrangements between the employee and the employer under which the employee regularly performs some or all of the duties of the employment at home.

The arrangements do not need to be in writing but it is advisable to do this, as the exemption does not apply where an employee works at home informally.

Where these rules are met, the additional costs of heating and lighting the work area and the metered cost of increased water usage can be met. There might also be increased charges for internet access, home contents insurance or business telephone calls and where working at home leads to a liability for business rates. HMRC accepts that the additional cost incurred can also be included.

However, unlike the self-employed, HMRC does not accept that a proportion of household fixed costs such as mortgage interest, rent, council tax or water rates are allowable.

A simpler flat rate method is available to cover additional costs. The rate is £6 a week from 6 April 2020. No records are required to be kept. However, to justify a higher payment, the message is: prove it!

The above rules only allow tax free payments to be made in specific circumstances. However, if payments are made outside of these rules or, in fact, no payments are made at all, the employee can claim personal tax relief themselves if they can prove that they incurred those costs or received those payments ‘wholly, exclusively and necessarily’ for the purposes of their job. In reality this is extremely difficult – some would say impossible – as HMRC requires the following tests to be met:

the employee performs the substantive duties of their job from home (i.e. the central duties of the job)
those duties cannot be performed without the use of appropriate facilities
no such facilities are available to the employee on the employer’s premises or are too far away
and 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.

So the moral for employees is to go for tax free payments, not tax relief!

Temporary COVID-19 exemption

A temporary exemption was introduced to support employees who were working from home as a result of the COVID-19 pandemic and needed to purchase home office equipment. The exemption covered the position where an employer reimbursed an employee who had bought home office equipment: a table, chair or monitor, for example. Normally, reimbursement after an employee purchases would be taxable. But for 202/21 and 2021/22, a temporary exemption from income tax and national insurance existed, so long as:

equipment was obtained solely to enable the employee to work from home because of the pandemic
it would have been exempt from income tax if provided directly to the employee by the employer
such arrangements are available to all employees generally on similar terms.

Care will be needed regarding current and future ownership of the equipment. We are happy to advise further.

Equipment costs

Capital allowances will be available to the business for the costs of providing equipment to employees who work at home. Provided that the private use of those assets by the employee is insignificant, then there will be no taxable benefit on the employee. Again, this could apply to things such as a laptop, desk or chair, provided that the employer has a written policy making it clear that the provision of the equipment is for work-related purposes.

Travel costs

The rules are so ‘simple’ that HMRC explains them in booklet IR490! However, the main point to note is that although an employee’s home may be treated as a workplace for tax purposes, this is not enough, on its own, to allow the employee to get tax relief for the expenses of travelling to another permanent workplace.

Employees are able to claim tax relief on the full travelling cost incurred in the performance of their duties. However, no relief is available for the costs of ordinary commuting or private travel.

The rules are complex but ordinary commuting is defined as travel between the employee’s home and a place which is a ‘permanent workplace’. A ‘permanent workplace’ includes places where there is a period of continuous work lasting more than 24 months or the period of attendance is all or most of the period of employment.

HMRC’s guidance states that, for most people, the place where they live is a matter of personal choice, so the expense of travelling from home to any permanent workplace is a consequence of that personal choice. As a result such travelling expenses will not qualify unless the location of the employee’s home is itself dictated by the requirements of the job.

Even if that condition is met, the cost of travel between the employee’s home and another permanent workplace is only deductible during those times when the home is a place of work.

Of course, employees who work at home are entitled to a deduction for the expenses of travelling to a temporary workplace – that is anything which is not a permanent workplace. It is as clear as that!

Be reasonable

As you can see, all things are possible but the key is to be clear about the rules, keep good records and be sensible about how much to claim.

How we can help

If you would like any help about obtaining tax relief on the costs of homeworking, please do contact us.

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54,800 customers claim tax relief for working from home

From 6 April 2020, employers have been able to pay employees up to £6 a week tax-free to cover additional costs if they have had to work from home.

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 on 1 October 2020, the online portal is simple to use and has been set up to process tax relief on additional expenses for employed workers who have been told to work from home by their employer to help stop the spread of coronavirus (COVID-19).

From 6 April 2020, employers have been able to pay employees up to £6 a week tax-free to cover additional costs if they have had to work from home. Employees who have not received the working from home expenses payment direct from their employer can apply to receive the tax relief from HMRC .

HMRC is encouraging customers claiming tax relief for working from home to apply directly through GOV.UK .

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

HMRC ’s Interim Director General of Customer Services, Karl Khan, said:

We want everyone to get the money that they are entitled to, so we’ve made the online service as easy to use as we can – it takes just a few minutes to make a claim.

Once the application has been approved, the online portal will adjust an individual’s tax code for the 2020 to 2021 tax year. The employee will receive the tax relief directly through their salary and will continue to receive the adjustment until March 2021.

HMRC is also reminding employed workers, for example healthcare workers and care home staff, that they can also claim tax relief on work-related expenses, including cleaning their work uniforms.

The extra money can help thousands of critical workers whose efforts are helping save lives during the coronavirus pandemic.

Employees who clean, replace or repair uniform or tools, or pay fees and subscriptions for their work can apply online directly to HMRC and see instantly if they are eligible for tax relief on work expenses.

In 2018 to 2019, more than 500,000 customers (66% of total expense claims) applied for the tax relief using an agent rather than directly from HMRC and will have had to pay fees or commission. But those who are paid through Pay As You Earn (PAYE) can claim directly to HMRC and keep all of the money which they are entitled to.

Agents will not be able to use the new service to apply for the relief on a customer’s behalf. This means customers will receive 100% of the tax relief that is due.

Further information

54,800 claims were submitted through the new portal between 1 and 11 October 2020.

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

Access the online portal for working from home expenses .

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, in which 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.

Employees may be able to claim tax relief on the cost of:

expenses for working from home
repairing or replacing small tools needed to do their job (for example, scissors or an electric drill)
cleaning, repairing or replacing specialist clothing (for example, a branded uniform or safety boots)
business mileage (not commuting)
travel and overnight expenses
professional fees and subscriptions

Employees can check if they are eligible for tax relief on their expenses and claim online .

The majority of tax relief claims are for repairing or replacing tools and branded uniforms, professional subscriptions and business mileage. Healthcare workers, people working in the food and retail sector and those in the construction industry are most likely to make a claim.

Employees could alternatively receive the tax relief as a lump sum payment if they wait and apply once the 2020 to 2021 tax year has ended.

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Homeworking tax relief
Have you Claimed Tax Relief for Homeworking?

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2023 and 2024 Work From Home Tax Deductions
Tax deductions for expenses needed to work from home are only available to taxpayers who itemize their deductions. Also, work-from-home expenses can only be written off if they exceed 2% of adjustable gross income . As is the case with most tax matters, taxpayers may be required to show receipts and other documentation of deductible expenses.
Home Office Tax Deduction 2023-2024: Rules, Who Qualifies
Your home office takes up 300 square feet in a 2,000-square-foot home, so you may be eligible to deduct indirect expenses on 15% of your home. That could mean a deduction of $1,050 in indirect ...
How to Claim WFH Tax Deductions
Instead of paying 20% of $50,000, which would be $10,000, the freelancer would pay 20% of $40,000, which equals $8,000. So, those $10,000 in WFH expenses reduce the total tax bill by $2,000 in ...
Tax Tips for Employees Who Work at 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.
Who Qualifies for Work-From-Home Tax Deductions?
So the small (and very specific) group of W-2 employees who can claim work-from-home tax deductions are Armed Forces reservists, certain performing artists, state or local government officials who are paid on a fee basis, people with physical or mental disabilities, and teachers. 1. If you fall into any of those groups, you'll still need to ...
Home Office Tax Deduction Rules for 2023
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 ...
Working at Home
Self-employment tax. Uncle Sam takes a bigger bite out of your income, employment-tax wise, when you're on your own. To cover your Social Security and Medicare taxes, in 2023 you'll owe Uncle Sam 15.3 percent on the first $160,200 of your net earnings from self-employment. This Social Security wage limit increases to $168,600 for the 2024 tax ...
Small business owners should see if they qualify for the home office
IRS Tax Tip 2021-136, September 15, 2021. Many Americans have been working from home due to the pandemic, but only certain people will qualify to claim the home office deduction.This deduction allows qualifying taxpayers to deduct certain home expenses on their tax return when they file their 2021 tax return next year.. Here are some things to help taxpayers understand the home office ...
Working from home? Customers may be eligible to claim tax relief in
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.
Claim tax relief for your job expenses
You'll get tax relief based on the rate at which you pay tax. Example. If you pay the 20% basic rate of tax and claim tax relief on £6 a week, you would get £1.20 per week in tax relief (20% ...
Homeworking tax rules in UK need to be simpler, say experts
The UK government has been urged by tax experts to reform and clarify laws around homeworking, as they warned more people were being caught up in "complicated and inconsistent" rules.
How to claim the working from home tax relief
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 ...
Working from home tax relief claims for 2022/23
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 ...
Working from home: HMRC's £125 tax break now harder to claim
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 ...
Expenses and benefits: homeworking: Overview
As an employer providing homeworking expenses for your employees, you have certain tax, National Insurance and reporting obligations. Homeworking expenses include: equipment, services or supplies ...
Working from Home Tax Relief
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.
Home Office Deduction at a Glance
Publication 587, If you use part of your home exclusively and regularly for conducting business, you may be able to deduct expenses such as mortgage interest, insurance, utilities, repairs, and depreciation for that area. You need to figure out the percentage of your home devoted to your business activities, utilities, repairs, and depreciation.
Homeworking and Tax Relief for Employees
Here we consider the tax implications of homeworking arrangements. Your status is important. The tax rules differ considerably depending on whether you are self-employed, as a sole trader or partner, or whether you are an employee, even if that is as an employee of your own company. One way or the other though, if you want to maximise the tax ...
Elektrostal
In 1938, it was granted town status. [citation needed]Administrative and municipal status. Within the framework of administrative divisions, it is incorporated as Elektrostal City Under Oblast Jurisdiction—an administrative unit with the status equal to that of the districts. As a municipal division, Elektrostal City Under Oblast Jurisdiction is incorporated as Elektrostal Urban Okrug.
Helping the Homeless in Moscow
Russia, like many other countries, struggles with the problem of homelessness.Estimates of Russia's homeless population range from the thousands to millions....
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 ...
Messengers from Moscow
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Georgii Daneliia. I Walk Around Moscow (1964)
Daneliia's delightful film about young people in early 1960s Moscow is distilled into this final scene, in which the young Nikita Mikhalkov sings the lighthe...