Working from home became normality for many people since the beginning of the COVID-19 pandemic in March 2020, and still is one year later. A recent survey estimates that 60% of us are still working from the confines of our own homes.
Some good news is that if your employer requires you to work from home, you can benefit from the working-from-home allowance. Employers can pay you £6 a week extra tax-free. And if your employer doesn’t add this allowance to your payslip, you can claim it yourself.
Employees can claim tax relief for additional household costs if you have to work from home on a regular basis, either for all or part of the week. This includes if you have to work from home due to COVID-19. However, you cannot claim tax relief if you choose to work from home. You can apply through the government's dedicated site where you can also check if you are eligible to claim. To claim, you'll need a Government Gateway User ID and password.
Additional household costs include things like extra heating & electricity expenses, work-related calls, internet connection and metered water bills. They don’t include costs that would stay the same whether you were working at home or in an office, for example, rent.
You’ll get tax relief based on the rate at which you pay tax. For example, if you pay the 20% basic rate of tax and claim tax relief on £6 a week you would get £1.20 per week in tax relief (20% of £6). You do not receive this money by cheque as it is done by altering your tax code that indicates to your employer how much tax to take off your payslip. Less tax will be taken off your payslip, meaning you’ll take home more.
You may also be able to claim tax relief on equipment you’ve bought for work, such as a laptop, office chair or mobile phone.
You can now claim for the 2021/22 tax year.