Employees required to work from home can have a £6 per week or £26 per month allowance paid tax-free by employers or, during the pandemic, can claim a deduction from earnings for this allowance, HMRC has confirmed.
The allowance is to cover tax-deductible additional costs that employees who are required to work from home have incurred, such as heating and lighting the workroom, and business telephone calls.
Employees can claim a fixed amount of £4 per week up to 5 April 2020 then £6 per week thereafter. Alternatively, employees can claim relief on the actual amounts incurred, subject to being able to provide evidence, such as phone bills.
Employees who are not reimbursed by their employer can claim this allowance as a deduction from their earnings in their tax returns (self assessment return or a postal form P87) or via the government gateway to claim tax relief in-year for 2020/21 through the code number. To find out which route to use, visit HMRC’s new online claims checker.
HMRC has confirmed that the £6 per week/£26 per month is available in full, even if an employee splits their time between home and office: ie it does not need to be pro-rated over the number of days spent each week at home and in the office.
Claims will not be rolled forward so, if applicable, a new claim will be needed next year.