The March 2020 lockdown brought many things for many people, but most noticeably it brought an end to office life and ushered in a new era of working from home, whether that be full-time or part-time or even only one day a week.
As a result of this change, it means that millions of people are able to claim working from home tax allowance from the 2020/21 and 2021/22 tax years.
But how exactly do you claim the working from home allowance? And what does it mean for you as a taxpayer?
In this blog post, we will be looking at what is the working from home tax allowance, what changes have been made to it, and how to claim work from home tax allowance.
Looking for a quick answer? Check out our drop-down menu below!
- What Is The Working From Home Tax Allowance?
- What Are The Changes With Working From Home Allowance?
- How Can I Claim Working From Home Expenses?
- How To Claim Working From Home Expenses Via Self-Assessment?
- How Much Work From Home Allowance Can I Claim?
- Can I Still Make A Backdated Work From Home Allowance Claim?
- How Do You Receive Your Working From Home Allowance?
Subscribe To Our Newsletter
What Is The Working From Home Tax Allowance?
In 2003, the government introduced the working from home tax allowance which allows anybody who works from home to be able to claim back some tax in order to cover household costs which will have increased as a result. Pre-pandemic, this amount would total a £4 a week tax-free sum.
Because of the pandemic, millions of people were forced to work from home and so in response, the government upped the allowance to £6 a week. On top of this, the rules were temporarily changed so that you did not need to prove that you worked from home regularly in order to receive it. As a result, it meant that you could claim up to £140 per year even if you only worked from home for one day.
As we have now had all covid restrictions removed, the millions of people who were forced to work from home are now moving back into the offices. In order to reflect these changes, HRMC has updated its guidance on the 2022/23 tax year and has introduced criteria that makes it harder to get a tax break.
What Are The Changes With Working From Home Allowance?
Whether or not you are eligible to claim back work from home expenses depends entirely on which tax year you are trying to claim for.
If you are trying to claim for the 2020/21 and 2021/22 tax years, then you will need to meet the following criteria in order to be eligible for the work from home tax relief. You will be able to claim for these tax years if:
- Your employer had told you to work from home
- As a result of working from home your household costs increased
- You did not get your expenses paid by your employer to cover the extra costs of working from home
There is still time to claim back for both the 2020/21 year and the 2021/22 year as you can backdate claims for the working from home allowance.
The rules, however, have changed for the 2022/23 tax eligibility. According to the new rules you cannot claim tax relief if you ‘choose to work from home’. This also includes workers whose contracts allow them to work from home some or all of the time, if you work from home because of covid, or if your employer has an office but you cannot get in as it is sometimes at full capacity.
You may, however, still be able to make a claim with HRMC if your job requires you to live far away from the office or if your employer does not have an office.
If you are self-employed, you cannot claim work from home allowance although you can include some expenses on your tax return.
How Can I Claim Working From Home Expenses?
A specific online portal has been set up by HMRC that allows you to claim working from home expenses. It can be done from this link here.
You will be asked a series of questions that are designed to check your eligibility to receive the working from home allowance. Different criteria is available for each different tax year.
Once you have completed the questions, you will need to use your Government Gateway user ID and password to make your claim. If you do not have a user ID then you will need to create one.
After you have logged into the Government Gateway, you will have to give the date from which you first started working from home. If this was the start of the first lockdown, then you will need to enter March 2020. From here you will then be able to claim working from home tax allowance for the entire 2020/21 tax year as well as an additional two weeks before.
You will be able to claim the additional two weeks before as the new tax year started on the 6th of April, but lockdown began on the 23rd of March. You will also be able to claim for the 2021/22 tax year at the same time and if it is applicable the 2022/23 tax year as well.
You will not be able to claim your working from home tax allowance if you pay your tax via self-assessment. What you will have to do instead is to apply via your tax return.
How To Claim Working From Home Expenses Via Self-Assessment?
For the 2021/22 Tax Year
- Online Returns – If you are filling in an online return form then you will need to fill in the box that is entitled ‘other expenses and capital allowances’ in the employment section. If you are a worker who has already filed their return for the 2021/22 tax year then you will be able to head online and change this section to reflect your working from home tax relief.
- Paper Returns – If you are filling out a paper return for your self-assessment then you should fill out section 20 on the full return and section 2.5 on the short form. If you have already filed your paper return then you can download a new tax return, write ‘amendment’ on each page and send the corrected pages to HMRC.
How Much Work From Home Allowance Can I Claim?
The aim of the working from home allowance is to cover the extra costs that you accumulate when you work from home rather than if you had gone to work in an office. As it is incredibly difficult to work out what percentage of your heating or electricity was used when you were at your desk, the Government offers a flat rate of £6 a week that workers can claim.
There are two main ways that you can get this payment:
- Through Your Employer – You can have an extra £6 a week tax-free added on to your salary.
- Through HMRC – Another way you can claim working from home allowance is through HMRC. If your employer does not agree to pay you your allowance, then you can deduct the amount from your taxable income which you can then claim in tax relief on it through HMRC.
Once the tax relief is added to your £6 a week it can add up:
- £62.40 a year for basic rate taxpayers, or £1.20 a week
- £124.80 a year for higher rate taxpayers, or £2.40 a week
- £140.40 a year for additional rate taxpayers, or £2.70 a week
If through working from home your costs add up to more than £6 a week, then you will be able to claim tax relief for a larger sum. However, if you go down this route you will need to provide evidence to the taxman of what your costs were, such as bills, receipts, or contracts. You will also have to prove these costs were directly connected to your employer’s requirement for you to work from home.
What Am I Able To Claim For?
You will only be able to claim tax relief for things that are directly related to your work such as business phone calls and gas and electricity for your work area. If you are unsure of how to fill out your tax return it is always a good idea to consult or use an accountant.
Can I Still Make A Backdated Work From Home Allowance Claim?
HMRC has stated that they will continue to accept backdated claims for workers who have not yet claimed. Any successful claims will receive a ‘lump sum payment’. They have also stated that taxpayers will have until the 5th of April 2025 to make claims for the 2020-21 tax year and until the 5th of April 2026 to make claims for 2021/22.
If A Couple Both Worked From Home, Can They Both Claim Working From Home Allowance?
As the working from home allowance is an individual benefit, if you have both had to work from home then you will both be able to claim it.
If you live in a property with two or more people, and you all had to work from home, then costs will have increased and you should all be eligible to claim it.
Can I Still Make A Backdated Work From Home Allowance Claim?
HMRC will adjust your tax code and you shall receive tax relief through your salary if you are claiming for the 2022/23 tax year.
Tax experts are now warning people who have previously made a claim to check their PAYE tax codes as if HMRC has included the relief and you are no longer eligible then you could get a surprise tax bill.
This covers everything that you need to know about how to claim working from home allowance. If you have any further questions, queries, or insight into the matter, then please feel free to get in touch!