If you are an employee working from home on a regular basis you may be eligible to receive or claim for a tax free payment to cover your home working costs. If you have had to work at home due to COVID-19 you will be eligible for this payment but if you choose to work from home you are not entitled to this tax free benefit.
How much can be claimed?
HMRC changed the amount you can claim from £4 a week to £6 a week from 6 April 2020. This can be claimed without providing proof of expenses incurred in working at home.
Alternatively you can make a claim for the actual additional costs incurred in working from home as long as you have the bills and receipts or contracts to prove the additional costs. Additional costs would include heating, water bills, home contents insurance, or having a new broadband connection. Proof of additional costs would be a comparison in heating costs for 2020-21 when you were working at home compared to 2019-20 when you weren't working at home for example.
You cannot claim for costs which remain the same whether you work at home or away from home - rent, mortgage payments, council tax, etc.
How to claim your tax relief
There are two ways you can receive this tax free payment:
1. From your employer
2. By claiming tax relief for these expenses when you complete your tax return for 2020-21.
The payment can be made for full or part weeks worked at home.
Your employer may make payment directly to you but if not you can claim on your Self-Assessment Tax Return. If you do not submit a Tax Return you can make a claim through your personal tax account.
HMRC's online tool for checking if you can make a claim for tax relief can be found on their website.
Have you purchased equipment you need to work at home?
If you have had to buy equipment such as a computer to enable you to do your work at home and your employer hasn't reimbursed you for this you can claim tax relief on this cost as well. The equipment must be bought to enable you to do your job and must be used for work with no significant private use. A claim for tax relief on this expenses can be made through your Self-Assessment Tax Return or through your personal tax account in the same way as your claim for working at home costs.