To help cover the extra costs, HMRC are allowing you to claim tax relief over the 2020-21 and 2021-22 tax years. You can do so using a designated online portal.
More than 800,000 people have already claimed in the first three months of this tax year. Around three million people made a claim for the entire 2020-21 tax year.
If you worked from home during the last tax year but failed to apply then, you can still do so now. Claims can be backdated, meaning that you may be eligible for up to £250 tax relief.
Am I eligible for tax relief?
Not everyone is eligible to claim so you need to check first that you:
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.
Do I need to work full time from home?
You don’t need to be working full-time from home to receive the tax relief.
In fact, even if you only work at home for just a day, you can still claim relief for the whole of the tax year.
But you must be required to work from home by your employer, rather than choosing to.
How much tax relief will I get?
There are two options to getting the tax relief:
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:
If you didn’t claim last tax year but worked from home, you can backdate your claim. This means you would get a full year’s payment as a lump sum in your next salary. 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.
How do I claim the tax relief?
To claim for the working from home tax relief:
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? tax relief paid?
Once your application has been approved, your tax code will be adjusted for the tax year. Your employer will then know how much to take from your pay.
You will then receive the tax rebate directly through your salary. If you are a basic rate taxpayer, you will get about an extra £5 added to your pay each month.
If you have a backdated claim, you will receive a lump sum in your next payslip.
What if it 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:
HMRC says that additional costs include things such as:
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:
You won’t get back the full cost of the extra expenses, only tax relief on the total.