Tax break available for split home-office working
Dec 09, 2020
With so many of us still working from home, and no doubt with the heating on most of the time now, don’t forget that employees can claim a tax break of £6 a week from HMRC. This tax relief is to cover some of the additional costs associated with working from home, such as electricity and heating, and is available to all workers even if they spend some time in the office.
The previous rule for employees was that they had to have a specific home working arrangement in place with their employer, under which they were required to work from home on a regular basis in order to be paid £6 a week tax free (£4 a week up to 5 April 2020). As a result of Covid-19, this rule has now been temporarily relaxed so that such arrangements are not currently required. Employees can also claim tax relief directly from HMRC if their employer doesn’t make the payments.
Part-time home working
Continued updates to the Covid-19 restrictions have led to ongoing shifts in working patterns. We have now become more ‘hybrid’, mixing working from home with working in the office part time. The good news is that even if an employee spends some time in the office, they are still entitled to the same £6 a week tax break. HMRC has confirmed that as long as employees are required to work from home on a regular basis and incur additional expenses, they are still eligible to claim £6 a week even if they are only at home say one day in five, and spend the rest of the week in the office.
If an employer doesn’t make the payments directly to the employee, there is a new online claims portal on the HMRC website so that the employee who is working from home can claim to deduct £6 a week, or £312 a year, from their employment income. That would generate a £124.80 tax refund for a higher rate taxpayer or £62.40 if basic rate.
If an employee submits an online claim, their PAYE code will be altered so the tax relief is given at source for the rest of this tax year. Alternatively, the employee can claim in their self-assessment tax return after the end of the tax year, or submit a form P87, online or by post.
There is a similar tax break for the self employed which provides a deduction from profits of up to £26 a month, depending on how many hours their home is used for business purposes.
If you have any queries about making a claim for home working expenses, please get in touch with the team and we’ll be happy to help.