Can I claim tax relief for working from home (WFH)?

This guide outlines who qualifies, how much can be claimed, and the application process, helping you maximise your tax benefits.

Eligibility for Tax Relief

Working from home refers to performing job-related tasks remotely, either full-time or part-time, instead of being physically present at an employer-provided office. However, eligibility for tax relief depends not just on where you work but why. To qualify, your employer must require you to work from home as a necessity, rather than offering it as a flexible option.

Who Can Claim Tax Relief?

You may be eligible for tax relief on additional household costs if both of the following apply:

• Your employer has not reimbursed your expenses
• You incur extra household costs due to working from home.

Additionally, one of the following conditions must be met:

• No suitable workplace is available at your employer’s premises.
• Your job requires you to live far from the office, making daily commuting unreasonable.
• Government restrictions require you to work from home.

Note: Renting a co-working space is not eligible for tax relief as it is considered an office.

Who Cannot Claim?

You cannot claim if you choose to work from home, including when:

• Your employer has an office, but you work remotely by choice.
• Your contract allows remote work but does not require it.
• Your employer reimburses your homeworking expenses.

How Much Tax Relief Are You Entitled to Claim?

For the 2022/23 tax year and beyond, HMRC allows employees who work from home to claim a flat rate of £6 per week (or £26 per month). This means you do not need to provide receipts or bills when claiming this fixed amount. However, you must have evidence that you are required to work from home.

If your actual work-from-home expenses exceed this flat rate, you may be eligible to claim a higher tax relief. In this case, you will need to keep supporting evidence, such as utility bills or internet costs, as proof, as you may need to present these if required.

Calculating Your Tax Relief

Your tax relief depends on your income tax rate:

This tax relief can add up significantly over time.

Let’s talk about a scenario here:

Sarah works as a customer support specialist for a fully remote tech company with no physical office. Since working from home is a requirement of her job rather than a personal choice, she may be eligible for tax relief on homeworking expenses. As an employee, she can claim £6 per week without providing detailed evidence. However, if her actual costs exceed this amount, she must submit proof.

She is not eligible for relief if her employer reimburses these expenses or provides an office that she chooses not to use.

For a basic rate taxpayer (20%), this relief saves £1.20 per week (£62.40 per year), while a higher rate taxpayer (40%) saves £2.40 per week (£124.80 per year).

Ways of Claiming Tax Relief for Working From Home

You can claim tax relief for working from home expenses through HMRC's online portal, a P87 form or Self-Assessment. Here's how:

Online Claim: Use HMRC's online service to file your claim. Log into your personal HMRC account and follow the on-screen instructions.

P87 Form: If you are claiming £2,500 or less in total employment expenses (including working-from-home costs ), you may need to submit a P87 form. This is useful if you are employed and do not file a Self-Assessment tax return.

Self-Assessment Tax Return: If you have already completed a self-assessment tax return, include your work from home tax relief in the “Employment Expenses” section.

Backdated Claims: If you missed claiming tax relief for previous tax years, HMRC allows you to backdate your claim for up to four years. This means you can still apply for relief from as far back as the 2020/21 tax year (if eligible).

For instance, John worked from home during the 2020/21 tax year but forgot to claim tax relief. He can still submit his claim for that year until April 5, 2025.

To make a backdated claim, visit HMRC’s online portal or submit a P87 form if required.

Common Misconceptions

Many employees believe that they automatically qualify for tax relief simply because they work from home. However, eligibility depends on specific conditions, particularly whether working from home is a necessity rather than optional or a personal choice.

You are not eligible for tax relief if: your employer allows flexible working arrangements but does not require you to work from home. You choose to work remotely for your own convenience.

You are eligible for tax relief if: Your employer requires you to work from home due to operational needs (e.g., no available office space); or Government restrictions (e.g., COVID-19 lockdowns) forced you to work remotely.

Remember: Tax relief is only granted when home working is a necessity, not a preference. Always check HMRC’s official guidance for the latest rules.

Additional Considerations for WFH Tax Relief

Employees working from home may be eligible to claim tax relief on certain work-related expenses, provided these costs are necessary for their job and have not been reimbursed by their employer.

Equipment Costs: If you purchase essential work equipment (such as a laptop or office chair) and do not receive reimbursement from your employer, you may be able to claim tax relief on these expenses. To qualify, the expenses must be wholly, exclusively, and necessarily for work purposes.

Note: Personal use of the equipment may affect eligibility, as only items required exclusively for work can be claimed.

Vehicle Expenses: If you use your personal car solely for business-related travel (excluding your regular commute), you may be eligible to claim mileage expenses. HMRC offers approved mileage rates, which can be claimed through Self-Assessment or an employer reimbursement scheme.

Conclusion

Eligible employees in the UK can still claim tax relief for working from home, but HMRC’s stricter criteria now apply. However, recent rule changes have made their relief less accessible than before.

By understanding the latest eligibility criteria and following the correct claim process, employees can still reduce their tax burden.

For a smooth and hassle-free tax filing experience, consider Taxd - your trusted partner for tax relief claims in the UK.

FAQs

1: Am I eligible to claim tax relief if my employer provides me with a home office allowance?

Yes, but it depends on whether the allowance fully covers your additional work from home expenses.

If your employer provides a fixed allowance (e.g., £4 per week) but your actual work-related expenses total £6 per week, you may claim tax relief on the extra £2.

However, if the allowance fully covers your costs, you cannot claim additional tax relief.

2: When can I claim tax relief for working from home?

You can claim tax relief for working from home if you incur additional household expenses due to remote work, such as increased heating, electricity, or internet bills.

You have two options for claiming this relief:

• 1. The flat rate of £6 per week (no receipts required).
• 2. The actual additional costs incurred (requires receipts or bills as proof).

Additionally, you can claim tax relief on necessary work-related equipment, such as desks or computers, if your employer has not reimbursed you for these expenses.

3: How can I determine if I qualify for working from home tax relief?

To qualify, both of the following conditions must be met:

1. Your employer requires you to work from home due to specific operational needs that cannot be met in an office setting (for example, lack of available office space or the nature of the job necessitates working from home).

2. You have incurred additional household costs directly related to working from home (such as increased expenses for electricity, heating, or internet services).

   Please note that you will not qualify if working from home was optional or a personal choice instead of a requirement.