WFH: All Change

22nd July 2022

 

HMRC have recently amended their approach to obtaining tax relief on household costs associated with working from home, effective from 6 April 2022.

 

Throughout the pandemic, employees were able to claim expenses associated with working from home for the full tax year, even if they were at home for just one day. Newspapers reported that this cost the Treasury nearly £500 million during the pandemic.

 

As a result, you can now only claim tax relief if:

  • your job requires you to live far away from your office
  • your employer does not have an office

 

You can no longer claim tax relief if you choose to work from home, including:

  • your employment contract lets you work from home some or all of the time
  • you work from home because of COVID-19
  • your employer has an office, but you cannot go there sometimes because it’s full

 

If you are eligible to work from home, you can either claim tax relief on:

  • £6 a week from 6 April 2020 (for previous tax years the rate is £4 a week) – you will not need to keep evidence of your extra costs
  • the exact amount of extra costs you’ve incurred above the weekly amount – you’ll need evidence such as receipts, bills or contracts
    • Note – you cannot claim for things that you use for business and privately, this includes broadband access

 

HMRC’s systems do not appear to have recognised this change in all cases and, as a result, we are commonly seeing 2022/23 PAYE codes still including the allowance. You can check what information HMRC hold in respect of your employment/s, and update this if necessary, on your HMRC Personal Tax Account.

 

It is always a good idea at the start of each new tax year to check your PAYE codes to ensure they are reasonable and prevent any unexpected over/underpayment via PAYE.

 

Do get in touch with a Whitings employee if you need any assistance.

Disclaimer - All information in this post was correct at time of writing.
Other Blogs
Jaimie King
19th April 2024 Audit exemption limits set to rise

What could the changes to Audit exemption limits mean for you?   The government has recently announced changes to company law that will see company size thresholds increased by 50%. This is hoped to reduce complexity and additional burden for companies. These changes are intended to be in place for year ends commencing on or…

Paul Jefferson
18th April 2024 Beware of VAT refund fraud

Beware of VAT refund fraud!   We have become aware of several recent cases where taxpayers’ bank account details have been amended on the HMRC portal, without their knowledge, so that VAT repayments have been fraudulently diverted to a third party.   It seems that HMRC have been acting on the basis of a fraudulent…

Andrew Band
17th April 2024 Whitings 2024 Annual Farming Seminar

Our Whitings 2024 Annual Farming Seminar is just around the corner.   Farming always has to cope with changing environment, weather, commodity prices, political changes, etc. This year these challenges feel heightened and this is why we are pleased to welcome back speakers from the Andersons Centre to inform us of these changes and what…

Amanda Newman
17th April 2024 Buy To Let through a Limited Company

There continues to be an ongoing debate when buying a residential property to let out about whether to buy this personally or set up a limited company to own it. Unlike our sole trader v limited company comparisons for a trading business there is not a clear division based on profits. There are a lot…

Nick Edgley
11th April 2024 Do you need to re-register for Child Benefits?

If you’ve heard about the changes post 5 April 2024 and are wondering whether you need to re-register for Child Benefits, this is the blog post for you.   If you have been affected by the increase in the High Income Child Benefit Charge cap to £60,000, then you may need to restart your Child…

Peter Brown
10th April 2024 Pension Contributions for directors

Are you thinking about planning ahead for retirement and want to find out more about Pension Contributions for directors?   When it comes to planning for your retirement, Company pension contributions can offer significant benefits in terms of reducing your company’s Corporation Tax bill. Here’s how you can use both personal and company contributions to…