Claiming Tax Relief for Working from Home

Employees who are required to work from home and want to understand whether they can claim tax relief for additional household costs. Many employees incur extra household costs when working from home but are unsure whether those costs qualify for tax relief under HMRC rules. HMRC applies strict conditions to employee expense claims. Tax relief is only available where the cost is incurred wholly, exclusively and necessarily for employment duties. If working from home is voluntary, relief is generally not available. If you work from home, you may be able to claim tax relief on additional household expenses that you incur while carrying out your employment duties. This relief applies where your employer requires you to work from home and does not reimburse your additional costs.

When You Can Claim Working From Home Tax Relief

You may be able to claim tax relief if:

• Your employer requires you to work from home.
• You incur additional household costs as a direct result.
• Your employer does not reimburse those costs.

The expense must meet the test of being wholly, exclusively and necessarily incurred in performing your employment duties.

When Tax Relief Is Not Available

You cannot normally claim tax relief if:

• You choose to work from home voluntarily.
• You are able to work from your employer’s premises but prefer working remotely.
• Your employer already reimburses your additional household costs.

Where working from home is a personal choice rather than an employment requirement, HMRC generally does not allow relief.

The £6 Weekly Working From Home Allowance

Employees who work from home may claim a flat rate allowance of £6 per week (£26 per month) to cover additional household costs such as heating, electricity, and internet usage. This allowance can usually be claimed without providing evidence of the actual costs incurred. If your employer already pays you up to £6 per week as a working-from-home allowance, the payment is normally tax-free.

Claiming Actual Additional Household Costs

Instead of claiming the flat rate allowance, employees may claim actual additional household costs where those costs exceed the £6 weekly allowance. However, when claiming actual costs:

• You must keep evidence of the additional costs incurred.
• Only the additional costs caused by working from home are allowable.
• General household expenses that would exist regardless of work do not qualify.

Evidence may include utility bills or other records demonstrating increased household expenditure.

Employer Reimbursements

If your employer reimburses your additional household costs, you cannot also claim tax relief on the same expenses. Where the employer reimburses costs up to the £6 per week allowance, the payment is generally not taxable and no further claim is required.

Backdating Claims

Employees may be able to claim working-from-home tax relief for up to 4 previous tax years, provided the claim is submitted within HMRC’s time limits. This means employees who were required to work from home in earlier years may still be able to claim relief.

Real-World Application

An employee is required by their employer to work from home and incurs additional household costs as a result. The employer does not reimburse these costs. The employee claims the £6 weekly working-from-home allowance, receiving tax relief based on their marginal income tax rate.

Risks and Compliance Considerations

• Claims may be refused where home working is voluntary rather than required.
• Only additional household costs caused by working from home qualify.
• Where claiming actual costs, supporting evidence may be required.
• Claims submitted outside the 4-year time limit may not be accepted.