Tax relief is available to employees working from home in specific circumstances. It’s important to note that this is not applicable if employees have just chosen to work from home. From 6 April 2022, individuals can claim if:
– Their expenses have not already been paid.
– Additional household costs have been incurred due to working from home.
– The employee is working from home due to one of the following reasons:
- Your business premises doesn’t have the facilities needed for the individual to carry out their work
- The nature of the job involved means that the employee needs to live so far from the business premises that daily commuting is unreasonable.
- Government restrictions require the employee to work from home.
These eligibility criteria mark a change from the rules during the pandemic lockdowns. During this time HMRC allowed anyone working at home to apply for the tax relief for the whole year regardless of how many days they worked at home.
Tax relief of £6 per week (£312pa) was available per tax year to cover extra costs incurred such as higher heating, electricity and internet bills. Claims can be backdated. Individuals have until the 5 April 2025 to make claims for 2020/21 tax year, and until 5 April 2026 make claims for 2021/22.
It’s important to check employees’ tax codes to see whether HMRC has included the relief in their notice of coding.
“The new rules about claiming tax relief for working from home are less relaxed than during the last couple of years,” says Darby Nicholls of re:accounts chartered accountants in Stevenage. “If employees are no longer eligible their tax code should be reviewed and corrected as necessary by HMRC. This will avoid the need to pay additional tax at the end of the tax year.”
Employees who are working partly at home and partly on site (hybrid working) and those who have elected to work from home full time are not eligible for tax relief.
Do any of your employees work from home?
Does your payroll reflect individuals’ eligibility for working from home tax relief?
The team at re:accounts loves everything about tax. We’re happy to help. Let’s talk!
