Working from Home Tax Relief Guide for the UK

Over the past 4 years, many workers in the UK experienced changes in how they interact with their workplace. Many had to work from home and experienced increases in household costs as a result. The HMRC recognized these increased work-related costs and changed the work from home (WFH) tax relief rules. This guide explains those changes and helps simplify making a tax relief claim for work-related household costs.

Key Takeaways

• You cannot claim WFH tax relief if your employer reimburses you for your expenses.
• You can claim a set weekly amount or the exact amount of costs above the weekly amount.
• You can submit your claim online or by post in most circumstances.
• You cannot claim relief if you choose to work from home.
• You can claim relief this year and the 4 previous tax years.

Table of Contents

• What is WFH Tax Relief?
• Who is Eligible for Work from Home Tax Relief?
• What Can You Claim When Working from Home?
• How To Claim Tax Relief for Working From Home
• How Much Tax Relief Can I Get for Working From Home?
• What is the Deadline to Apply for WFH Tax Relief?
• Can I Still Claim for Working From Home Tax Relief?
• Streamline Your Tax Preparation with FreshBooks

What is WFH Tax Relief?

The HMRC working from home (WFH) tax relief applies to eligible claimants who work from home for some or all of the tax year. It is a government initiative aimed at assisting workers who experience an increase in costs as a result of working remotely during COVID-19. The tax relief for working from home is limited to items and expenses you pay for, including home office supplies, gas, and electricity. You cannot claim expenses your employer reimburses you for.

Who is Eligible for Work From Home Tax Relief?

The UK working from home tax relief applies to workers who work from home for part or all of the week. It can offset costs for workers who are required to work from home.

The tax relief only applies if working from home is a requirement of your employment. You are eligible to claim tax relief if your employer does not have a company office or if your job requires you to live far away from the office and a daily commute is not feasible. 

You are not eligible for HMRC tax relief if: 

• You work from home because of COVID-19 
• You choose to work from home for part or all of the week because your employment contract allows you
• Your employer has a local office, but sometimes occupancy limits prevent you from utilising it regularly

Work from home relief does not apply if you are self-employed.

What Can You Claim When Working from Home? 

You can claim a basic set amount or itemised values for work-related expenses. The set amount reflects the increased basic costs like heat, electricity, and your home phone for business-related calls. 

Applicable expenses in an itemised claim include:

• Repairing or replacing small tools you need to do your job (like scissors or a printer)
• Cleaning or repairing a uniform or specialist clothing required for your job
• Travel to and from work via transit, vehicle or bike if it is a temporary workplace
• Work-related travel and overnight expenses
• Professional membership fees and subscriptions, if these fees are required for you to be able to do your job
• Equipment that will last less than 2 years if you use it for work and there’s no significant private use
• Substantial equipment required for your job, such as computers

You cannot claim tax relief for things that you use for both private and business use, such as rent or your broadband connection. You also cannot claim tax relief for:

• The initial cost of clothing purchases
• Repair or cleaning of your everyday clothing
• Laundering costs of your uniform or specialist clothing if your employer provides a laundering service that you choose not to use
• Personal protective equipment (PPE)
• Professional fees and subscriptions reimbursed by your employer
• Cars, bicycles, or motorcycles

How To Claim Tax Relief for Working From Home 

Claiming working from home tax relief as a paid employee follows a similar procedure as any business expense. There are some limitations to eligibility—you can find out if you are eligible for relief using the government gateway online system. 

The rules changed for claiming household expenses for working from home as of 6 April 2022. 

You can only now claim working from home, if:

• Under government restrictions, you must work from home
• There is no suitable workplace at your employer’s premises for you to work
• The distance to and from your employer’s premises is unreasonable to travel daily

If you are eligible, you can claim relief online or by post using form P87. The simplest and fastest way to submit your claim for expense relief is to use the government gateway ID system. You cannot use the online system if:

• You claim working from home expenses over £2,500
• You make claims for more than 5 jobs
• You complete the Self Assessment tax return

If you submit your tax refund using the complete Self Assessment tax return, you must file through your tax return. If you claim a tax rebate from more than 5 jobs, you must submit your claim by post.

You cannot claim tax rebate on any expenses your employer has reimbursed you for.

How is the Tax Relief Paid? 

When your claim is approved, you receive your expense relief through a change in your tax code. Your new tax code will include your working from home allowance. You won’t need to make a new claim in future years, and you’ll pay less tax on your salary for the following tax year.

Notify the HMRC if you stop working from home to eliminate end-of-year surprises. They will adjust your tax code so you don’t pay taxes at the end of the year. 

Claiming tax relief for extra expenses can all seem confusing and perhaps a little daunting. Learn how FreshBooks can take the pain out of tax preparation with this short video.

How Much Tax Relief Can I Get for Working From Home?

You can submit a claim for the set weekly amount or the exact amount of the additional costs above the weekly amount.

As of 6 April 2020, the flat rate is £6 per week. The set amount for claims before 5 April 2020 is £4. You do not need to provide receipts if you claim the basic amount.

The amount of relief you receive depends on your tax rate. Basic rate taxpayers get relief from tax on 20% of £6 or £1.20 in tax relief per week for your household expenses. Higher rate taxpayers get 40% of £6 per week.

If this is your first year working from home, you should keep all logs and receipts for your increased house costs. Moreover, you can also log and organise your expense using the FreshBooks expense and receipt tracking feature. These costs can add up quickly. It is easier to accurately calculate your claim if you have the information organised before tax time.

If the total amount is more than £6 per week, you can claim the extra costs above the £6 limit. You must provide detailed records and receipts to make a claim. 

You do not need to claim relief every year if your first claim is approved. Your tax code is adjusted to reflect your work from home status. You only need to make a new claim in future tax years if your work situation changes.

What is the Deadline to Apply for WFH Tax Relief?

The deadline for the current tax year is 5 April the following year. However, the HMRC will accept backdated claims. You can make a claim for relief for working from home for this tax year and the previous 4 tax years. For example, the deadline to submit a claim for the 2020/2021 tax year is 5 April 2025. The deadline for the 2021/2022 tax year is 5 April 2026. 

Can I Still Claim for Working From Home Tax Relief?

You can still submit a claim if your household costs increased over the last 4 years. However, the HMRC updated the eligibility requirements for the 2023/2024 tax year. You cannot claim tax relief if you could go to your employer’s work premises but choose to work from home.

The HMRC relaxed the eligibility criteria during the tax years of 2020/2021 and 2021/2022 because workers were mandated to work from home and experienced the burden of the associated additional household costs. Previous tax years had stricter rules regarding tax rebates for extra costs.

Does My Tax Code Change If I Work From Home?

Your tax code and therefore taxable income will change if you work from home in the UK. A basic rate taxpayer may see a change in their overall income tax relief.

If your job requires you to work then you are entitled to claim tax relief for additional household costs. To cover expenses, you receive a decrease in taxes paid through your salary.

Working from home as a requirement of your job is not the same as being self-employed and operating a home-based business.

Streamline Your Tax Preparation with FreshBooks

Working from home tax relief is one way the HMRC is helping workers offset the increasing household costs associated with having to work from home. By submitting your claim, you can have less tax taken off your salary, leaving more for your day-to-day expenses.

Ensure you are getting the most out of your tax return. FreshBooks accounting software can take the guesswork out of tax preparation and filing. Try FreshBooks free and sign up today to see how easy tax filing can be!

Navigating the rules and regulations of tax relief can seem daunting, but it doesn’t have to be. FreshBooks offers guides for many tax relief topics. Learn more about Business Tax Write-Offs for Small Business and start getting the most out of your money today.

More Useful Resources

• Sole Trader Tax Guide
• Allowable Expenses & Disallowable Expenses
• Self Employed Expenses
• Marriage Allowance
• Tax On Rental Income

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