During the pandemic, HMRC changed the rules around the Home Working Tax Relief, and anyone working from home could claim. This has now changed again, and from 6th April 2022 employees should check their notice of coding and get it updated if the relief has been included and they are not required by their employer to work from home 100% of the time.

Hybrid working isn’t included.

The Background

When Coronavirus was at its peak, the Government told us all to work from home wherever possible. HMRC relaxed the the rules around the Home Working Tax Relief so anyone working from home for even a short period of time could claim for the whole year.

Since 6th April 2022, the relief is only available if those same employees are required to work from home by their employer 100% of the time. Having claimed the relief in previous years, it’s possible that HMRC will have included it in the employee’s notice of coding for this year by default.

Employees should check with HMRC and ask for it to be removed if they’re no longer eligible.

The Guidance

The updated HMRC guidance from 6th April 2022 states: ‘You can claim if your employer has not already paid your expenses and you have additional household costs as a result of working from home.

‘One of the following must also apply:

• there are no appropriate facilities available for you to perform your job on your employer’s premises;
• the nature of the job requires you to live so far from the employer’s premises that it is unreasonable for you to travel to those premises on a daily basis;
• you are required, under government restrictions, to work from home.

‘To claim tax relief, you cannot have just chosen to work from home.’

What it means to your employees

Employees were able to claim £6 per week of the entire year, even if they only worked from home for a short period of time. If the relief is included in the most recent Notice of Coding, and your employees are no longer eligible, they will have extra tax to pay at the end of the year.

Under the new guidance, hybrid working, where part of the week is worked at home and part in the office, is classed as flexible working and does not qualify for the Home Working Tax Relief. Neither do employees whose expenses are already paid by their employer.

We strongly recommend this change is communicated to your employees to ensure they’re clear where they stand. Many employers advised employees that the relief was available during the pandemic, and encouraged them to claim it, so it’s important that the change and resulting risk be clearly communicated too.

If you’d like to discuss the changes in the Guidance, please get in touch. As ever, we’re here to help you need us!