Tax break for Working from Home (£62/year)

Posted 9th Jun 2020
If your employer requires you to work at home, you can – and have always been able to – claim for increased costs due to working from home, eg, heating and electricity.

Clearly, right now many firms have closed workplaces and that means across the UK millions of staff are temporarily required to work from home, and therefore are eligible to claim for increased costs.HMRC says it will consider claims from employees working at home due to coronavirus measures if their usual workplace is closed.

Yet apportioning these costs is tough. So instead you can, in simple terms, claim a rate of £6/week. You can claim more if your costs are higher, but it becomes a much more labour intensive process.

There are two ways to do this:

  • Employers can pay you £6/week extra tax-free. Employers can give you an allowance up to this amount and what they give you is free from tax, so you get it all (to give you more, it will need to make special arrangements).

    But right now – with many firms struggling – asking may be bad timing, so instead you can...
  • Claim tax relief on £6/wk (worth £1.20/wk at 20% tax, £2.40/wk at higher rate). If your employer won't pay expenses for your extra costs due to necessary working from home, but you have them, then you can ask for the amount to be deducted from your taxable income.

    To make the process easy, HMRC says that claims in line with the employers' payment (ie, for £6/wk) will not need to justify that figure – meaning you won't need to keep receipts or prove information.

    The impact of a £6/wk claim is the tax savings, that's a gain of £1.20/wk (about £62/year) for basic 20% rate taxpayers, and £2.40/wk (about £124/yr) for higher 40% rate taxpayers.

    If you believe you have higher increased costs then you can claim more, but you will need evidence of the cost increases

How to claim the tax reliefIf you normally do a self-assessment form, you can claim on it. Yet for most people, this will simply require filling in a P87 form. This can be done through an online P87 form through your Government Gateway account or by filling out a postal P87 form.

You'll be asked for your employer's name and PAYE reference (which you can find on your payslip or P60), and your job title. For postal P87s, you'll also need your national insurance number. The key section for filling in is titled 'Using your home as an office' (pictured below). Assuming you're not eligible for tax relief on other work-related expenses, like uniform tax rebates, leave them blank.
Community Updates
Thanks @msu_nav we have moved this over to Money Saving Tips & Tricks
I am currently working a temporary work from home job. Could I get this?
Love__Bargains09/06/2020 17:50

I am currently working a temporary work from home job. Could I get this?

I'm no expert but I'd say so. You're paying tax and working from home, which fills the criterion...
Claim money off your employer!

Most people will be happy to keep there job
ashmac09/06/2020 19:32

Claim money off your employer! Most people will be happy to keep there job

You can just claim it off the government on your tax and don't have to ask your employer
Should I claim now or claim when I eventually go back to work?
Considering how much people are saving on petrol it really isn't worth messing about with your tax code.

When all goes back to normal people will get screwed over from the I.R no doubt as they have a tendency of getting things wrong.
s_dusara09/06/2020 20:53

Should I claim now or claim when I eventually go back to work?

Think the best bet was to do it when you're back to work save having to do more than one claim
This is priceless. So not only you don't have to commute and face other people on your way you get a tax break as to oppose to all the key workers.
I'd actually pay £62 a year to work from home more. I've saved a fortune by not driving, buying lunch, popping to the shop for the Mrs, vending machines, cafe, cakes, dry cleaning etc.

My last job I worked from home full time for 5+ years and I never claimed the allowance despite being advised. I felt it was ethically wrong and the Government shouldn't have to fund my choice to work from home given I had a lower carbon footprint, more time at home, greater flexibility etc. It always seemed a bit of a fingers up to HMRC and IR if I claimed.
Edited by: "darlodge" 10th Jun
My employers are not offering this as far as I am aware.

Can I self claim, is the process pain free and what other implication can this trigger?
Already posted a few times (other duplicates were removed)…316

My work have been giving it to all staff from the start without us needing to ask which was good.
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