Working from home and the £6 per week allowance
During the pandemic the Government relaxed the conditions to enable all of those working from home to be paid £6 a week tax free by their employer. If that wasn’t paid by the employer, the employee could claim relief for £6 a week against their employment income for a tax refund from HMRC.
Those relaxed rules applied for 2020/21 and 2021/22, but from 6th April 2022 the rules reverted to the strict statutory position.
When can employees claim?
Employees can claim tax relief if they are working from home under a homeworking agreement, for example because:
- Their job requires them to live far away from the office.
- Their employer does not have an office.
- The office is closed every Friday and employees are required to work from home that day.
Are there any specific exclusions?
Yes! Tax relief cannot be claimed:
- If the employee chooses to work from home OR if their contract allows them to work from home some of the time (Hybrid working).
- If they work from home for any Covid related reason.
- There is no space for them in the employer’s office.
The employee can only claim for costs directly attributable to their work. Examples would include business phone calls, or gas or electric to heat their workspace. Anything with a mixed use, for example broadband or rent, cannot be included.
How much can be claimed?
The employee can either claim £6 per week, when there is no need to retain any evidence of extra costs OR the extra amount of costs above the £6, but they would need to keep evidence relating to the amounts claimed. This would include receipts, bills or contracts.
The tax relief would usually be received through a change to their tax code. If the employee hasn’t been aware that they can claim, they can backdate their claim for this and the previous four tax years. (If they are backdating a claim, they would need to be aware that the rate for year prior to the 6th April 2020 was £4 per week.)
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