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Don’t miss out on tax relief for home working!

29 June 2021
Darren Hughes
Reducing Tax, Payroll, People

Have you been forced to work from home or possible still are due to the pandemic? Has your employer not reimbursed these costs? If the answer is YES then make sure that you are claiming the working from home tax relief.

Ordinarily in order to claim income tax relief for home working your contract of employment requires you to work from home. During the pandemic many more people have been forced to work from home because of government guidance regarding home working.

Since 6 April 2020 you can claim £6 per week (previously £4 per week) without the requirement of keeping evidence to support your claim. The claim goes towards a proportion of your household costs like gas and electricity, water rates and business calls and broadband costs.

If you believe the additional household costs of homeworking are more than £6 per week you have the option to make a larger claim based on the actual additional cost of gas and electricity, metered water and business phone calls, including dial-up internet access. You will need evidence to support that claim such as receipts, bills or contracts. Ideally the evidence should include corresponding bills for a period before you were based at home.

In addition, if you have had to buy equipment yourself such as a computer, desk or mobile phone you should be able to claim tax relief for that provided you need it for your job and there is no significant private use of the equipment.

Whatever figures you use make sure they are added to your Tax Return so you don’t miss out on the claim. It may be a relatively small amount but every little helps!

If you want to claim the tax relief but do not have any other requirements to complete a Tax Return then follow the link here.

For those of you who like the detail HMRC’s technical guidance is as follows:

Before a deduction can be permitted for a household expense it must be demonstrated that the expense has been incurred wholly, exclusively and necessarily in the performance of the duties of the employment, see EIM31630 and EIM31660. Those are the statutory conditions imposed by Section 336 ITEPA 2003. HMRC accept that those conditions are met where the following circumstances apply:

  • the duties that the employee performs at home are substantive duties of the employment. “Substantive duties” are duties that an employee has to carry out and that represent all or part of the central duties of the employment (see EIM32780)
  • those duties cannot be performed without the use of appropriate facilities
  • no such appropriate facilities are available to the employee on the employer’s premises (or the nature of the job requires the employee to live so far from the employer’s premises that it is unreasonable to expect him or her to travel to those premises on a daily basis)
  • at no time either before or after the employment contract is drawn up is the employee able to choose between working at the employer’s premises or elsewhere.

There are a number of examples on HMRC employment income manual if you are unsure if you qualify, the link can be found here see EIM32790

The content in this blog is correct as at 29/06/2021 See terms and conditions.

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