Find out how you could get a tax refund whilst working from home.
How much can I get?
Where these conditions are met, the employee can receive up to £6 per week from their employer without having to provide supporting evidence for the cost.
The costs covered by these payments include the extra cost of:
- Heating and lighting
- Metered cost of increased water usage
- Increased internet charges
- Business telephone charges
- Business insurance and rates (if applicable)
This means that if you work from home for a full year you can claim £312 from your employer. If you pay tax at 40% this could save you £124.80. If a couple are both working from home this means they could save £249.60 in tax.
If the employee already pays for broadband before working from home then the cost is not extra whilst working from home, therefore not allowable.
If, however, they do not have broadband at home, and then pay for it to work from home, this counts as an increased expense and is allowable.
Costs which stay the same regardless of whether the employee is at home are not allowed, i.e. rent or council tax.
What does HMRC allow?
HMRC accepts that the employer can pay for some costs for the employee working at home if the employee must work at home regularly, and if the employer and employee have an arrangement.
HMRC generally accepts that these criteria are met during the pandemic.
The arrangement between the employee and employer doesn’t have to be written down, but must be part of a formal process, and the work must be done at home in place of at work, rather than just taking extra work home at night.
What is it?
Since the Covid-19 pandemic started, many employers have allowed their employees to work from home, as per the Government advice.
Normally, if an employer pays expenses for an employee whilst they are working at home, this is viewed as a benefit-in-kind and therefore is taxable.
However, there is an exemption where it is reasonable to pay so the employee can continue to work.
This means that employers can help with the cost of working at home during the pandemic.
Check If You Can Claim
What if my employer doesn’t pay?
If your employer doesn’t pay you the £6 per week, then you can still claim it through the Government website.
If you want to claim more than this, you must keep accurate records, and only claim for extra costs incurred through having to work from home.
This can include equipment bought to be able to do your job from home such as a computer and desk, providing that there is no significant private use of it.
You can check your eligibility to claim on the Government website, which you can find using the link above.