Working from home: Update

As taxpayers continue to work from home due to Coronavirus, we provide an update on tax relief available for the costs of homeworking. 

Employees

Following a previously announced relaxation to the rules, where an employer does not reimburse an employee for the costs of Working from home, the employee can claim tax relief for either:

• The actual additional costs of heating, lighting, metered water and business calls resulting from working from home.
• A flat-rate of £26 per month (£6 per week), plus itemised business calls.

Before the relaxation, employees could only claim tax relief on expenses where strict conditions were met. This meant that most individuals homeworking due to Coronavirus would not have been able to claim tax relief on their working from home costs.

For 2020-21 and 2021-22, employees working from home due to Coronavirus can make the flat-rate tax relief claim for a full year even if they have only been required to work from home on one day during the tax year, or if they work part-time.

Claims:

• Already made for 2020-21 will not be automatically rolled forward. A new claim is required for 2021-22.
• Can be made using HMRC’s dedicated online portal, via post, telephone or on a tax return, for those within Self Assessment. 
• Can be backdated for four years.

Self-employed individuals

Self-employed taxpayers can claim tax relief on costs that are wholly and exclusively incurred for business purposes. This can include costs relating to Working from home.

• A proportion of costs such as light and heat, insurance, council tax, repairs, cleaning and mortgage interest may be deductible.
• Alternatively, as a simplification, Fixed-rate deductions have been available since April 2013.

Useful guides on this topic

COVID-19: Employees working from home
Working from home: a guide for employees working from home due to Coronavirus.  

Working from home (employer/ee)
What expenses can employees claim for homeworking? Are the rules the same for the self-employed? How do you make a claim?

Working from home (self-employed)
What expenses can you claim for working from home, if you are self-employed? Are there special rules and precedents for certain types of trade or profession?

Use of home as an office: Calculator
What costs can I claim when working from home? How do I calculate my claim? What restrictions should I apply? 

External links

HMRC: Claim tax relief for your job expenses