There are two important conditions:
- You must be obligated to work from home.
- You do not receive any allowance from your employer to cover the additional costs involved.
You can of course formulate your own claim by listing out all your household expenses (gas and electricity, council tax, water rates, rent, mortgage interest, insurance) and then claiming a proportion of these. This proportion should reflect that part of the house that is used only for employment purposes. For example if you use one room out of six then the fraction should be one-sixth. If that room is also used for personal reasons then the fraction should be restricted accordingly.
Or you might find it simpler to claim the Government’s offer of £6 a week from 6 April 2020 (previously £4 a week).
Examples
Henry is employed as a project manager and he pays tax at the basic rate of 20%. Apart from very occasional visits to the office he was obligated to work from home during the period 06/04/2020 - 21/03/2021 (50 weeks). He submits a claim to HMRC for £6 x 50 weeks = £300 and receives a tax refund of £60.
Harriet is employed as a design consultant at the same place. The only difference in her circumstances is that her annual income is well over £50,000 so she pays tax at the higher rate of 40%. Harriet submits precisely the same claim as Henry and receives a tax refund of £120.
George however is made of sterner stuff. Like Harriet his annual income is well over £50,000 so he pays tax at the higher rate. But he knows he’s a valued employee so he tackles his employer in the first instance and manages to persuade him to pay a “use of home allowance” of £10 a week on top of his salary. Over the 50 week period he receives:
There’s no tax relief to claim but George reckons he has done well with his arrangement - which he has.
For those claiming tax relief there is a practical difficulty which is simply overcome. A claim for work-related expenses has to be made online using a Government Gateway and password.
Remember that a use of home allowance is not the only relief available. If an employee is required to incur other expenses in order to perform his/her duties then there will be scope to make these claims as well. Do bear in mind that for a claim to be valid an employee must be obliged to incur the expenditure in the first instance. HMRC may want to see some evidence of this.
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