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.