Work From Home Tax Relief Guide

Employed and have to work from home? You can normally claim tax relief on some of your household expenses.

Working from home tax relief is approved and paid by HMRC and is sometimes known as the working from home allowance.

The WFH allowance exists to help employees cover the expense of home based work for example work phone calls and gas and electricity costs.

To keep things simple HMRC have allowed a weekly flat rate so you don’t need to provide detailed evidence.

Anyone that hasn’t claimed for the working from home allowance when they were eligible can backdate their claim for four tax years which usually results in a WFH tax rebate.

No matter what job, our simple guide helps you to find out your eligibility and how to claim back your  tax rebate for working from home.

Can I claim for work from home tax relief?

To be eligible to claim tax relief for working from home it’s got to be a requirement of your job and HMRC makes it very clear that choosing to work from home is not acceptable criteria.

HMRC states that one of the following WFH rules must also apply for you to be eligible:

• Appropriate facilities are not available for you to work at your employer’s premises.
• On a daily basis your job requires you to travel an unreasonable distance to your employers premises.
• Under government restrictions you have to to work from home.

HMRC has a basic online tool to help with finding out if you qualify for the WFH allowance.

Having a contract of employment or employer correspondence confirming your working from home requirements would be helpful if HMRC ask for evidence.

Working from home tax rebate and Covid-19

Because of Covid-19 HMRC allowed people to claim for working from home in the 19/20 and 20/21 tax years if you worked for some or all of the time at home.

From the 6th April 2022 HMRC has reverted back to their pre-covid rules of you needing to work from home and not just working from home as a choice.

How much is the working from home tax relief worth?

The agreed working from home tax relief rate is £6 per week. This is the agreed rate without having to provide receipts.

The figure you will receive back as a tax rebate will depend on the rate of tax you pay.

• Basic rate tax payers will get £1.20 per week or £62.40 per tax year.
• Higher rate tax payers will get £2.40 per week or £124.80 per tax year.
• Additional rate taxpayers will get £2.70 per week or £140.40 per tax year.

You can make a claim for the exact amount of costs incurred. If you need to claim more than the agreed rates you’ll need evidence that shows the extra cost you incurred from working at home.

I volunteer to work at home, can I claim working from home allowance?

If you’ve made a ‘homeworking arrangement’ with your employer, and work at home on a regular basis you should still be able to make a claim if:

• There’s a recognisable pattern for example three days at home and two days at your normal place of work.
• Any work you do at home is part of your employment.

To claim work from home tax relief in this situation your employer must make a contribution towards your expenses.

How do I claim a tax rebate for working at home?

To process your working from home tax rebate claim it’s best to follow the instructions provided by HMRC (the tax office) on their website.

P87 work from home tax rebate: A form P87 will normally be required by HMRC which can be submitted to the tax office online or by printing off the form and sending it by post.

The form P87 should be used to claim your work from home tax rebate if you don’t need to complete a self assessment tax return.

If you are claiming a WFH tax rebate from past tax years you can include all years on the same P87 claim form along with any other work related expenses up to a total value of £2,500 per tax year.

Self assessment work from home tax rebate: 

Individuals who are claiming a WFH tax rebate as an employed person and complete a self assessment tax return will need to enter the working from home allowance in the employment section of their tax return.

There is a different process if you are self employed and claiming will involve your self assessment tax return.

Do I need evidence to claim?

If you are claiming the WFH allowance via a P87 form HMRC expects you to provide evidence with your initial claim form.

This is to prove that your claim meets their criteria under the working from home legislation.

HMRC states:

“This could be a copy of your employment contract.

If it’s not in your contract, you’ll need to send other evidence that shows why you must work from home. For example, a letter from your employer explaining why you must work from home.”

If you don’t provide the appropriate evidence with your P87 form your claim will normally be rejected.

My employer reimburses me for my expenses can I still claim?

If you are reimbursed by your employer for working from home this needs to be considered before you make your claim and entered on your claim form.

HMRC states:

“If your employer has paid or given you an allowance for your expenses in this claim, you cannot claim tax relief for these.”

Employer reimbursement below the agreed rates or actual amounts means a claim is still possible for the difference.

How is my working from home tax rebate paid by HMRC?

HMRC will send you a form P800 if you have claimed the working from home allowance from a previous tax year.

The P800 explains in figures how much you have been awarded and total tax rebate you are due in each tax year.

In addition the P800 guides you to claim any repayment online through your personal tax account OR wait for a cheque through the post.

Working from home tax relief and self assessment tax returns

If you complete a self assessment tax return you have to include the working from home allowance in the correct box on your tax returns employment page.

You can amend a previously submitted tax return if you didn’t include it on the original return.

Self assessment amendment timescales will apply to any refund that may be due back through self assessment.

Working from home tax code

After your working from home claim has been processed you will receive a new tax code from the tax office which will include your working from home allowance.

HMRC increases your personal allowance by the value of the working from home allowance which means you pay less tax.

The point of putting the allowance into your tax code is so you don’t need to make another claim in the future.

Your new tax code will increase your tax free allowance meaning you will pay less tax each time you are paid.

If you stop working from home you should tell HMRC so they can take the allowance out of your code so you don’t underpay tax.

What else can I claim tax relief on?

You’re allowed to claim tax relief on what you have actually spent because you have been working from home but you will need to provide evidence like gas, electricity and phone bills.

Working from home tax relief isn’t allowed on household expenses you would be paying for anyway, such as rent or mortgage payments.

And it doesn’t cover expenses that relate to both business and private use, like broadband and telephone line rental.

Our free income tax guides are available to learn about other tax reliefs that you might be entitled to which can be included with your WFH tax rebate claim.

What if I’m self-employed?

For self-employed individuals operating from home, different taxation guidelines apply. You’re entitled to claim tax relief on various home office expenses.

There are two primary methods for making these claims for sole traders:

One: Actual costs method

Should you determine that the flat rate approach inadequately covers your expenses, you may opt to calculate the specific business-related portion of your household expenses.

Qualifying costs are for the perecentage used for business only and include:

• Water.
• Heating and lighting.
• Phone and broadband bills.
• Home insurance.
• Repairs specific to your work area.
• Council tax.

You must maintain precise records and be prepared to justify your business-use calculations to HMRC if they ever ask.

Two: Flat rate method 

The simplified expenses system allows you to claim a standardised amount based on your monthly home-working hours, structured as follows:

• 25 to 50 hours per month: £10 per month.
• 51 to 100 hours per month: £18 per month.
• 101 hours or more per month: £26 per month.

This approach reduces administrative burden, as it eliminates the need for detailed expense tracking.

Common questions about Home Working Tax Relief

What amount can I claim for home working?
HMRC provides a standard rate of £6 per week for home working claims without requiring proof of expenditure. If your actual expenses exceed this amount, you can claim the exact sum, but you must keep documentation such as receipts and invoices and provide them with your claim.

Can I request work from home tax relief if my employer covers my expenses?
No, you cannot claim additional tax relief for expenses that your employer has already reimbursed. You can claim for the difference if you are reimbursed for less than the flate rate allowance or your actual expenses.

Is it possible to claim working from home tax relief for past years?
Yes, you can submit claims for home working tax relief under PAYE for the last four tax years.

Will my tax code be adjusted if I work remotely?
Yes, receiving a work from home tax rebate will result in a change to your tax code moving forward. This will allow for the tax relief to be given throughout the tax year and means you don’t need to make another claim.