Millions of workers can still claim the working from home tax relief worth up to £420, but HMRC has warned that the number of people who can claim it for the current tax year (2022/23) will drop as more workers head back to the office.
If you have been asked to work from home, even if it is for just one day, you can still claim for the full tax year in question.
If you have not been asked to work from home, but choose to, then you can’t for that tax year.
These have always been the rules, but HMRC confirmed that with most offices now open, fewer people can claim for the current tax year.
"The rules around the homeworking deduction, which have been in place for some years, have not changed. However, circumstantial changes (including an end to the legal requirement to work from home where possible) now mean many people will no longer be eligible to claim the deduction,” a spokesperson for HMRC said.
But don’t let that put you off claiming for any of the tax years that you qualify for, based on the rules above.
You have until 5 April 2025 to claim for the 2020/21 working from home tax relief and 5 April 2026 to claim for the tax year 2021/22.
We explain how to make a claim and who is eligible for the working from home tax relief.
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.
Kalpana is the Editor of The Money Edit.
She’s an award-winning journalist 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 started her career at the Financial Times group, covering pensions and investments.
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