As the work landscape continues to evolve in the wake of the global pandemic, more people are embracing the concept of working from home. To support these employees, the UK government has introduced a range of work from home tax relief schemes. In this comprehensive guide, we will discuss various tax relief options available for remote workers, including tax relief for working at home, how to claim tax relief for working from home, eligibility criteria and what’s changed with the work from home tax relief scheme in 2023.
What is The Work From Home Tax Relief Scheme?
The Work from home tax relief scheme, also known as Working from Home Allowance, is a Government scheme launched in 2003 to allows employees working remotely to claim tax relief on certain expenses incurred while working from home.
Initially set at a £4 a week tax-free sum, the allowance was increased to £6 a week with the pandemic forcing millions of workers to work from home.
Now that all Covid-related financial restrictions have been lifted, millions of employees are returning at work either full- or part-time. In response, HMRC revised its instructions for the 2022–23 tax year and overhauled some of their requirements to qualify for the tax relief.
Tax Relief for Working at Home: What Expenses Are Covered?
The tax relief for working at home aims to help home workers cover additional costs they might incur relating to business phone calls and electricity/gas.
A limitation of the work from home tax relief scheme is that you cannot claim claim back on bills that are used for both private and business use, for eg broadband.
Tax relief home working benefits can be claimed in two ways:
a) Flat-rate expenses: Employees can claim a flat-rate allowance of £6 per week or £26 per month, a standard amount set by the government to cover additional expenses incurred when working from home.
b) Actual expenses: If an employee believes that their actual expenses are higher than the flat-rate allowance, they can claim tax relief on the actual amount spent. However, this requires providing evidence and receipts for the additional expenses incurred.
If you wear a work uniform, specialist work clothing or Personal Protective Equipment (PPE), you may be able to claim additional expenses back.
How much tax relief can I claim?
You can either claim tax relief on:
- £6 a week since 6 April 2020, or
- the exact amount of extra costs incurred above the £6 weeklyamount, however you’ll need to provide evidence (receipts, bills or contracts).
Tax relief from working from home is based on the tax rate you pay. This means that if you’re on the basic taxpayer rate of 20% and claim back £6 of working from home tax relief, you’ll get £1.20 per week back. Per year, the tax relief adds up to:
- £1.20 a week for basic rate taxpayers, or £62.40 a year
- £2.40 a week for higher rate taxpayers, or £124.80 a year
- £2.70 a week for additional rate taxpayers, or £140.40 a year
How to Claim Tax Relief on Working from Home
You can claim this payment in two ways:
- Claim tax relief directly from HMRC with an online form, or
- Your employer can pay it through your salary.
To claim tax relief directly with HMRC, head to their online portal. You’ll first need to answer a first questions online to ensure you’re eligible for the home worker tax relief scheme. Once qualified, you’ll be asked to log into your Government Gateway account with your user ID and password in order to submit your claim directly within the portal.
If you pay your tax with a self-assessment every year, you will need to submit your claim directly within your tax return - you won’t be able to claim the working from home allowance through your online portal.
You can claim tax relief for working from home for up to four tax years. The tax relief you’ll be able to get will depend on your tax rate for the period you’re claiming back and what the eligibility rules were for it as well.
Tax relief for working from home in 2023: What has changed?
The good news is that as remote working becomes more prevalent in the UK, the Government continues to support employees through work from home tax relief schemes.
Eligibility rules to claim back wfh tax relief for the 2022-2023 tax year have changed. You will be able to claim tax relief on working from home is:
- your employer doesn’t have an office, or
- if your job requires you to live far away from the company’s office,
If your employer has an office and/or your employment contract allows for remote working (home working or else) but includes an office as your regular place of work, you will not be able to claim this allowance.
These rules are to stay for remain for the 2023/2024 tax year.
This is significant change from previous tax years, notably 2020-2021 and 2021-2022 tax years. In previous tax years, workers could claim home worker tax relief if their employer requested them to work from home, or if they worked from home more frequently and/or if their employer didn’t pay any increase in costs linked to working from home.
A few final tips to help you claim home worker tax relief
- Keep accurate records of your expenses and maintain receipts for any actual expenses claimed.
- Stay informed about any changes to the tax relief schemes or new initiatives introduced by the government - tax years in the UK start on April 6th every year.
- Consult a tax professional or accountant if you're unsure about your eligibility or how to claim
As the work landscape continues to evolve in the wake of the global pandemic, more people are embracing the concept of working from home. To support these employees, the UK government has introduced a range of work from home tax relief schemes. In this comprehensive guide, we will discuss various tax relief options available for remote workers, including tax relief for working at home, how to claim tax relief for working from home, eligibility criteria and what’s changed with the work from home tax relief scheme in 2023.
What is The Work From Home Tax Relief Scheme?
The Work from home tax relief scheme, also known as Working from Home Allowance, is a Government scheme launched in 2003 to allows employees working remotely to claim tax relief on certain expenses incurred while working from home.
Initially set at a £4 a week tax-free sum, the allowance was increased to £6 a week with the pandemic forcing millions of workers to work from home.
Now that all Covid-related financial restrictions have been lifted, millions of employees are returning at work either full- or part-time. In response, HMRC revised its instructions for the 2022–23 tax year and overhauled some of their requirements to qualify for the tax relief.
Tax Relief for Working at Home: What Expenses Are Covered?
The tax relief for working at home aims to help home workers cover additional costs they might incur relating to business phone calls and electricity/gas.
A limitation of the work from home tax relief scheme is that you cannot claim claim back on bills that are used for both private and business use, for eg broadband.
Tax relief home working benefits can be claimed in two ways:
a) Flat-rate expenses: Employees can claim a flat-rate allowance of £6 per week or £26 per month, a standard amount set by the government to cover additional expenses incurred when working from home.
b) Actual expenses: If an employee believes that their actual expenses are higher than the flat-rate allowance, they can claim tax relief on the actual amount spent. However, this requires providing evidence and receipts for the additional expenses incurred.
If you wear a work uniform, specialist work clothing or Personal Protective Equipment (PPE), you may be able to claim additional expenses back.
How much tax relief can I claim?
You can either claim tax relief on:
- £6 a week since 6 April 2020, or
- the exact amount of extra costs incurred above the £6 weeklyamount, however you’ll need to provide evidence (receipts, bills or contracts).
Tax relief from working from home is based on the tax rate you pay. This means that if you’re on the basic taxpayer rate of 20% and claim back £6 of working from home tax relief, you’ll get £1.20 per week back. Per year, the tax relief adds up to:
- £1.20 a week for basic rate taxpayers, or £62.40 a year
- £2.40 a week for higher rate taxpayers, or £124.80 a year
- £2.70 a week for additional rate taxpayers, or £140.40 a year
How to Claim Tax Relief on Working from Home
You can claim this payment in two ways:
- Claim tax relief directly from HMRC with an online form, or
- Your employer can pay it through your salary.
To claim tax relief directly with HMRC, head to their online portal. You’ll first need to answer a first questions online to ensure you’re eligible for the home worker tax relief scheme. Once qualified, you’ll be asked to log into your Government Gateway account with your user ID and password in order to submit your claim directly within the portal.
If you pay your tax with a self-assessment every year, you will need to submit your claim directly within your tax return - you won’t be able to claim the working from home allowance through your online portal.
You can claim tax relief for working from home for up to four tax years. The tax relief you’ll be able to get will depend on your tax rate for the period you’re claiming back and what the eligibility rules were for it as well.
Tax relief for working from home in 2023: What has changed?
The good news is that as remote working becomes more prevalent in the UK, the Government continues to support employees through work from home tax relief schemes.
Eligibility rules to claim back wfh tax relief for the 2022-2023 tax year have changed. You will be able to claim tax relief on working from home is:
- your employer doesn’t have an office, or
- if your job requires you to live far away from the company’s office,
If your employer has an office and/or your employment contract allows for remote working (home working or else) but includes an office as your regular place of work, you will not be able to claim this allowance.
These rules are to stay for remain for the 2023/2024 tax year.
This is significant change from previous tax years, notably 2020-2021 and 2021-2022 tax years. In previous tax years, workers could claim home worker tax relief if their employer requested them to work from home, or if they worked from home more frequently and/or if their employer didn’t pay any increase in costs linked to working from home.
A few final tips to help you claim home worker tax relief
- Keep accurate records of your expenses and maintain receipts for any actual expenses claimed.
- Stay informed about any changes to the tax relief schemes or new initiatives introduced by the government - tax years in the UK start on April 6th every year.
- Consult a tax professional or accountant if you're unsure about your eligibility or how to claim
