Working From Home Tax Relief Guide

Employed and have to work from home? You can normally claim tax relief on some of your household expenses.

Working from home tax relief is approved and paid by HMRC and is sometimes known as the working from home allowance.

The WFH allowance is aimed at employees who bear extra expenses due to home based work for example work phone calls and gas and electricity costs incurred in your workspace.

To keep things simple HMRC have allowed a weekly flat rate so you don’t need to provide detailed evidence.

Anyone that hasn’t claimed for the working from home allowance when they were eligible can backdate their claim for four tax years which usually results in a WFH tax rebate.

No matter what job, our working from home tax rebate guide helps you to find out your eligibility and how to claim back your WFH tax rebate.

Can I claim for working from home tax relief?

To be eligible to claim tax relief for working from home it’s got to be a requirement of your job and HMRC makes it very clear that choosing to work from home is not acceptable criteria.

HMRC states that one of the following WFH rules must also apply for you to be eligible:

• Appropriate facilities are not available for you to work at your employer’s premises.
• On a daily basis your job requires you to travel an unreasonable distance to your employers premises.
• Under government restrictions you have to to work from home.

HMRC has a basic online tool to help with finding out if you qualify for the WFH allowance.

Having a contract of employment or employer correspondence confirming your working from home requirements would be helpful if HMRC ask for evidence.

Working from home tax rebate and Covid-19

Because of Covid-19 HMRC allowed people to claim for working from home in the 19/20 and 20/21 tax years if you worked for some or all of the time at home.

From the 6th April 2022 HMRC has reverted back to their pre-covid rules of you needing to work from home and not just working from home as a choice.

How much is the working from home tax relief worth?

The agreed working from home tax relief rate is £6 per week. This is the agreed rate without having to provide receipts.

The figure you will receive back as a tax rebate will depend on the rate of tax you pay.

• Basic rate tax payers will get £1.20 per week or £62.40 per tax year.
• Higher rate tax payers will get £2.40 per week or £124.80 per tax year.
• Additional rate taxpayers will get £2.70 per week or £140.40 per tax year.

You can make a claim for the exact amount of costs incurred. If you need to claim more than the agreed rates you’ll need evidence that shows the extra cost you incurred from working at home.

I volunteer to work at home, can I claim working from home allowance?

If you’ve made a ‘homeworking arrangement’ with your employer, and work at home on a regular basis you should still be able to make a claim if:

• There’s a recognisable pattern for example three days at home and two days at your normal place of work.
• Any work you do at home is part of your employment.

To claim work from home tax relief in this situation your employer must make a contribution towards your expenses.

How do I claim a tax rebate for working at home?

To process your working from home tax rebate claim it’s best to follow the instructions provided by HMRC (the tax office) on their website.

P87 work from home tax rebate: A form P87 will normally be required by HMRC which can be submitted to the tax office online or by printing off the form and sending it by post.

The form P87 should be used to claim your work from home tax rebate if you don’t need to complete a self assessment tax return.

If you are claiming a WFH tax rebate from past tax years you can include all years on the same P87 claim form along with any other work related expenses up to a total value of £2,500.

Self assessment work from home tax rebate: 

Individuals who are claiming a WFH tax rebate as an employed person and complete a self assessment tax return will need to enter the working from home allowance in the employment section of their tax return.

There is a different process if you are self employed and claiming will involve your self assessment tax return.

Working from home tax rebate P800

HMRC will send you a form P800 if you have claimed the working from home allowance from a previous tax year.

The P800 explains in figures how much you have been awarded and total tax rebate you are due in each tax year.

In addition the P800 guides you to claim any repayment online through your personal tax account.

Working from home tax relief and self assessment tax returns

If you complete a self assessment tax return you have to include the working from home allowance in the correct box on your tax returns employment page.

You can amend a previously submitted tax return if you didn’t include it on the original return.

Self assessment amendment timescales will apply to any refund that may be due back through self assessment.

Working from home tax code

After your working from home claim has been processed you will receive a new tax code from the tax office which will include your working from home allowance.

HMRC increases your personal allowance by the value of the working from home allowance which means you pay less tax.

The point of putting the allowance into your tax code is so you don’t need to make another claim in the future.

Your new tax code will increase your tax free allowance meaning you will pay less tax each time you are paid.

If you stop working from home you should tell HMRC so they can take the allowance out of your code so you don’t underpay tax.

What else can I claim tax relief on?

You’re allowed to claim tax relief on what you have actually spent because you have been working from home but you will need to provide evidence like gas, electricity and phone bills.

Working from home tax relief isn’t allowed on household expenses you would be paying for anyway, such as rent or mortgage payments.

And it doesn’t cover expenses that relate to both business and private use, like broadband and telephone line rental.

Our free income tax guides are available to learn about other tax reliefs that you might be entitled to which can be included with your WFH tax rebate claim.