Don’t miss out on the working-from-home tax relief – worth up to £420

Are you working from home? You can still claim tax relief for this tax year.

woman working from home
(Image credit: Getty Images)

The working-from-home tax relief is available to millions of people who have been asked to work from home by their employers and is worth up to £420.

Millions of people are working from home this month who'd normally be working in an office, perhaps because of rail strikes, other travel disruption or poor weather making it difficult to travel.

The rules state that if you are asked to work from home by your employer for just one day, you can claim for the full tax year, regardless of whether you choose to work from home on other days.

Therefore, the current disruption in its own right may not trigger eligibility to claim the working from home allowance, but is a pertinent time to remind you of the rules with so many staying put. Even if you are at home because of, say, the weather, and it's your choice, if at any other time of the year you were asked to work from home for just one day, you can claim for the full year.

Plus, as we explain, you can claim for previous years too.

According to its official figures, £270 million was paid in the working from home tax relief in the 2020/21 tax year, dropping to £150 million in the year 2021/22 tax year.

Despite this, many people are still eligible and may not have claimed what they are entitled to. 

Indeed, given the cost of living crisis, millions of households are seeing their finances ever more stretched as a result of rocketing energy bills, rising fuel costs, and increasing food prices

This makes it all the more important for those who do qualify for the relief to claim now, and help reduce the impact of those rising bills. 

HOW MUCH WORKING FROM HOME TAX RELIEF WILL I GET? 

The amount you get depends on what rate taxpayer you are. Here is what you could get:

  • Basic rate (20%) taxpayer - you can claim £1.20 per week/£62.40 per tax year
  • Higher rate (40%) taxpayer - you can claim £2.40 per week/£124.80 per tax year
  • Additional rate taxpayer (45%) - you can claim £2.70 per week/£140.40 per tax year 

Remember, HMRC will let you backdate the claim for the tax year 2020/21 and 2021/22. If you backdate it and claim for the current tax year, you could get as much £420 if you're an additional rate taxpayer, £375 if you're a higher rate taxpayer and £187 if you're a basic rate taxpayer.

HOW CAN I APPLY FOR WORKING FROM HOME TAX RELIEF? 

Unless you carry out a self-assessment, you can use HMRC's dedicated online site through which to make your claim. See below if you are self-employed.

Before you can proceed with your claim, you will be asked a number of questions to assess your eligibility.

You will need your Government Gateway user ID and password to hand. If you don’t have one, then you can create one in about 10 minutes, according to HMRC, as long as you have your National Insurance number and some form of ID such as a valid UK passport or a recent payslip.

AM I ELIGIBLE FOR WORKING FROM HOME TAX RELIEF?  

Not everyone is eligible for the working from home tax relief. The key point is that your employer must have told you to work remotely - it can’t have been your own decision. 

If your company is already covering these extra expenses or paying you a working from home allowance then you can’t double up by making a claim with HMRC too.

How can I claim the working from home tax-relief if I pay tax via self-assessment?

If you do a self-assessment tax return, then you can’t use the microservice, but you can still claim. 

When you complete your online tax return, fill in the ‘other expenses and capital allowances’ section in the employment part.

For paper returns, you’ll find it in section 20 on the full return form, and section 2.5 on the short form.

How is working from home tax relief paid? 

How you are paid depends on the year that you are claiming for. If your application has been approved for relief to cover 2020/21 tax year, then you will be paid whatever you are entitled to as a lump sum in your salary. For the 2021/22 tax year, HMRC will adjust your tax code to reflect in your salary that you owe less tax each month. 

If you are paying tax via self-assessment, your total tax payable will be adjusted accordingly. 

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Kalpana Fitzpatrick
Digital Editor, Money Week

Kalpana is the Digital Editor of Money Week.

She’s an award-winning journalist and author with extensive experience in financial journalism. Her work includes writing for a number of media outlets,  including national papers and well-known women’s lifestyle and luxury titles, where she was finance editor for Cosmopolitan, Good Housekeeping, Red and Prima.

She is the author of Invest Now: The Simple Guide to Boosting Your Finances (opens in new tab) - out December 2022.

She started her career at the Financial Times group, covering pensions and investments.

As a money expert, Kalpana is a regular guest on TV and radio; appearances include BBC One’s Morning Live,  ITV’s Eat Well, Save Well, Sky News and more. 

She was also the resident money expert for the BBC Money 101 podcast and co-author of the e-careers personal finance course.

A well-known money and consumer journalist, Kalpana also often speaks at events.

She is passionate about helping people be better with their money, save more and be smarter spenders.

Follow her on Twitter and Instagram @KalpanaFitz.