During the COVID-19 pandemic in March 2020, the UK government encouraged people to work from home when possible. This led to the introduction of tax relief rules to help with increased household costs associated with remote work.
Recently, changes have been made to the eligibility and claims process for work-from-home tax relief, affecting millions of people.
New Eligibility Criteria
To claim tax relief, you must now be required to work from home and not receive expenses from your employer to cover remote work costs. You cannot claim tax relief if you choose to work from home or if your employment contract allows for remote work.
Claiming Tax Relief
Previously, you could claim £6 per week without evidence for the tax years 2020/21. However, as of 6th April 2022, you can only make a claim if you are mandated to work from home, not by choice.
Backdating Your Claim
You can backdate your claim for up to 4 years, allowing you to claim tax relief for previous years. The deadlines for backdating claims are 5th April 2025 for the 2020/21 tax year and 5th April 2026 for the 2021/22 tax year.
How Much Tax Relief You Could Get
The amount you can claim depends on your tax rate:
- Basic rate taxpayer (20%): £1.20 per week or £62.40 per tax year
- Higher rate taxpayer (40%): £2.40 per week or £124.80 per tax year
- Additional rate taxpayer (45%): £2.70 per week or £140.40 per tax year
You may claim exact amounts for additional expenses above the £6 weekly allowance with appropriate evidence (e.g., receipts, bills).
Eligible Expenses for Tax Relief
You can claim tax relief for expenses related to your work, such as gas and electricity, metered water, business phone calls, and internet access. In some cases, you may even claim expenses for equipment purchased for work, such as computers, desks, and chairs.
How to Make a Claim
To apply for tax relief, you may need to create your Government Gateway ID if you don’t have one. Prepare evidence (e.g., NI number, P60, valid UK passport, receipts, and bills) to support your claim for exact expenses. Once approved, the tax relief will be adjusted in your 2022/23 tax code, and you’ll receive it directly through your salary.
Keep in mind these changes when considering work-from-home tax relief. For more information or accounting-related queries, contact us or reach out to us at enquiries@aitaccountants.co.uk, where our trusted advisors can guide you through the process.
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