Employees working from home due to the COVID-19 pandemic are still allowed to claim working from home tax relief on expenses not reimbursed by their employers. However, they will need to submit a new claim to HMRC for the tax year 2021/22.
Employers can usually pay a tax-free allowance of up to £6 per week (£26 per month) to employees required to work from home. During the COVID-19 pandemic, employees can claim tax relief for this amount when employers do not reimburse costs.
This tax free allowance is to cover additional expenses that employees who are required to work from home have incurred, e.g. heating and lighting, telephone or internet access charges etc.
The maximum amount reimbursed on which tax relief is allowed is:
- £6/week for weekly paid employees (£4/week prior to 6 April 2020); or
- £26/month for monthly paid employees (£18/month prior to 6 April 2020)
Alternatively, employers can reimburse the actual expenses, if the employee can provide evidence of the amounts incurred, such as telephone or internet access charges.
Where employees are not reimbursed by their employers, they can claim tax relief in their personal tax returns or via the government gateway to claim tax relief through their PAYE code.
If an employee made a claim for the tax year 2020/21 tax year, this will not be automatically rolled forward to the tax year 2021/22. The employee needs to make a new claim for the 2021/22 tax year.
HMRC has previously confirmed that the £6 per week (£26 per month) is available in full, even if an employee splits their time between home and office (i.e. the amount does not need to be pro-rated over the number of days spent each week at home and in the office).
Our understanding is that if an employee who has told HMRC that they are working from home returns to working in the office, there is no requirement for the employee to tell HMRC, so the relief can apply to the whole of the tax year.
The relaxation to allow working from home tax relief to be claimed during the COVID-19 pandemic is explained in HMRC’s guidance manual EIM32815.
Check if you can claim
You can use the HMRC’s online service to check if you can claim for the working from home tax relief.