Working from home tax breaks

Any employee can claim up to £125 annually through the Government's working from home tax relief. Here's how to apply for it and how to calculate what's owed to you

How much are working from home tax breaks worth?

You can claim the full year’s entitlement of £125 in working from home tax breaks if your employer told you to work from home — even if it was only for one day.

It doesn’t matter if you have returned to the office since early April — you can still get the full amount for the 2021/22 tax year. Working from home for just some of the week still qualifies.

However, you cannot claim tax relief if you choose to work from home. Nor can you claim tax relief if your employer covered your expenses or paid you an allowance.

If you complete an annual tax return, you will be able to apply for the tax relief via your Self Assessment.

How to apply for working from home tax breaks

You can use the HMRC working from home tax relief portal, where you will be asked a series of questions to check if you are eligible or not. To progress with your claim, you will need a Government Gateway user ID and password, which you can create if you don’t already have one. HMRC says it takes about 10 minutes to create.

What documents do I need for my claim?

To create a Government Gateway ID, you will need your National Insurance number and a form of ID such as a recent payslip or P60, or a valid UK passport. If you are claiming an exact amount for costs then you will need evidence such as receipts, bills or contracts.

>See also: Working from home – How to manage your time and increase productivity

How much can I claim as an employee?

Each employee can claim up to £125 per year. This is made up of either £6 a week from April 6, 2020, or the exact amount of extra costs incurred above the weekly amount, which you will need the evidence mentioned above for.

Tax relief is based on the rate at which you pay tax, so if you pay the 20 per cent basic rate of tax and claim tax relief on £6 a week you would get £1.20 per week in tax relief (20 per cent of £6), which would result in £62.40 a year. Higher rate taxpayers can claim £2.40 a week (40 per cent of £6 a week), which would result in £124.80 a year.

What can I claim tax relief for?

You may be able to claim tax relief towards bills including gas and electricity, metered water, business phone calls and internet costs. You cannot claim for the whole bill — just the part that relates to your work.

How will I get the money?

Once your application has been approved, your tax code will be adjusted for the 2021/22 tax year and you will receive the tax relief directly through your salary.

Can I backdate my claim to the 2020/21 tax year?

If you were required to work from home during the 2020/21 tax year but did not claim for the tax relief, it’s not too late.

Employees returning to the office can still claim for household expenses for this tax year, says HMRC, whose latest figures revealed nearly 800,000 have claimed working from home tax reliefs since April.

You can backdate claims for up to four years and will receive a lump sum payment if you are successful.

Myrtle Lloyd, HMRC’s director general for customer services, said: “More people are getting back to office working now, but it’s not too late to apply for tax relief on household expenses if they’ve been working from home during the pandemic.”

Further reading on working from home

Do I need to pay business rates working from home?

Related Topics

Tax & Vat

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