Tax relief is available to employees who are required to work from home on a regular basis for some or all of the week on the additional costs that they incur.
However, you cannot claim tax relief on these costs if your employer has either directly reimbursed your expenses or paid you an allowance to cover them.
Many offices have been closed since the start of the 2020-21 tax year due to COVID-19 meaning that millions more employees are now eligible. The claim is made as part of the Self-Assessment Tax Return for those who already are required to submit one.
You can claim tax relief on:
- An allowance of £6.00 a week equating to £312.00 for each of the 2020-21 and 2021-22 tax years; or
- The £312.00 annual allowance plus actual amount of the extra costs that you have incurred and not been reimbursed by your employer above the allowance.
The full annual allowance is claimable whether you have worked from home for the full year or only a small part of it, theoretically even for just one day, so long as you were required to.
The areas where you may be able to claim relief are:
- a proportion of gas and electricity bills;
- a proportion of metered water bills;
- the cost of business phone calls including dial-up internet access;
- the cost of a laptop, printer, office furniture or mobile phone;
- the cost of offices supplies such as paper, batteries or printer ink.
Where you claim the actual costs, you will need to be able to provide evidence if required by HMRC such as the invoices, receipts or contracts.
In addition, for the costs of equipment, there are key two considerations in determining whether it is eligible for tax relief:
- it is essential for you to do your job; and
- the equipment is used predominantly for work purposes with no significant private use.
For instance, if you have purchased a laptop and your employer has a policy restricting private use, this would support it was purchased for work purposes.