Working from home? Claim tax relief for 2021/22

Date published: 23 May 2021

Anyone who has been required to work from home due to coronavirus - even for one day - and has increased costs, can claim tax relief from the government for 2021/22.

If employed workers were told to work at home by their employer because of coronavirus and, as a result, their household costs have increased, they are eligible to claim the working from home tax relief.

From 6 April 2020, employers have been able to pay employees up to £6 a week tax-free to cover additional costs if they have had to work from home. Employees who have not received the working from home expenses payment direct from their employer can apply to receive the tax relief from HMRC, if they are required to work from home and have increased costs - such as heating and electricity.

Eligible taxpayers can claim tax relief based on the rate at which they pay tax. For example, if an employed worker pays the 20% basic rate of tax and claims tax relief on £6 a week, they would receive £1.20 a week in tax relief (20% of £6 a week) towards the cost of their household bills.

Higher rate taxpayers would therefore receive £2.40 a week (40% of £6 a week). Over the course of the year, this could mean taxpayers can reduce the tax they pay by £62.40 or £124.80 respectively.

HMRC had received more than three million claims for the tax relief for the 2020/21 tax year, and is urging people to claim for this tax year (2021/22).

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Half a million people have already reduced their Income Tax this year by up to £125, by claiming tax relief on their working from home expenses.

“We want everyone who’s eligible to benefit, so we’ve made it quick and easy to do online. Check if you’re eligible and apply at GOV.UK by searching ‘working from home tax relief’.

“HMRC is continuing to help and support people affected by the pandemic.”

Financial expert Martin Lewis, of MoneySavingExpert, says you don't need to provide receipts or information, unless you believe you have higher costs than £6 a week. He says you can claim more, but you will need evidence of the costs increase and be able to prove the costs are due to you working from home. 

Taxpayers can check if they are eligible via GOV.UK.

To claim for tax relief for working from home, employees can apply directly via GOV.UK for free. Once their application has been approved, the online portal will adjust their tax code for the 2021/22 tax year. They will receive the tax relief directly through their salary until March 2022.

If employees were required to work from home last year but did not claim for the tax relief, they have not missed out; HMRC will accept backdated claims for up to four years. They will receive a lump sum payment for any successful backdated claims.

Using an agent to apply for the working from home tax relief and other similar schemes could result in customers paying unnecessary fees or commission. Using the GOV.UK service is quick and free, and customers will receive 100% of the tax relief that is due.

Agents will not be able to use the online portal to apply for the relief on a customer’s behalf.

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