When the Covid-19 pandemic first struck, government guidelines were introduced encouraging people to work from home where possible. Many people found themselves fashioning new home offices into any spare space they had available. As a result of spending more time at home, household costs inevitably increased, and consequently the government allowed those working from home to claim tax relief on any additional costs incurred. And for the last two years people have been making successful claims from HMRC.
However, now that more and more people have returned to the office full time or are flexi-working, the government rules have also changed. As of April 2022, you can only claim if you have to work from home (eg. If your employer doesn’t have an office). You cannot claim if:
- your employment contract lets you work from home; some or all of the time
- you work from home because of COVID-19
- your employer has an office, but you cannot go there sometimes because it’s full
Not eligible? Can I claim for previous years?
You can backdate your claim if you were eligible in prior tax years.
- 2020-21 the deadline to claim is 5 April 2025
- 2021-22 the deadline to claim is 5 April 2026
You can check your availability and claim online here: https://www.tax.service.gov.uk/claim-tax-relief-expenses/who-claiming-for
Or download the P87 form and send this to: Pay As You Earn and Self Assessment, HM Revenue and Customs, BX9 1AS.
How much could I get?
There is a flat rate of £6/week or £312 for the tax year without the need to provide any evidence.
It is important to note that this is not the actual amount of money that you will receive back; there are a lot of misleading headlines and articles which unfairly lead the reader to believe this. This is in fact the amount that you can claim tax relief on, so in real terms this works out (for a basic 20% rate taxpayer) at £1.20/week or £62.40 for the year.
*You can also claim the exact amount of extra costs you’ve incurred above the £6 a week amount, but you’ll need to provide evidence such as receipts, bills or contracts to do this.
This includes most utilities, such as gas and electricity, water, business phone and internet, and potentially equipment you’ve bought, like laptops, monitors and PC accessories, desks and chairs.
What should I do if I’m self-employed?
Much like keeping track of your other business expenses you can work out a sensible apportionment of your utility bills if you work at home. However, if you’d rather not have to calculate this manually, you can use the simplified flat rate expenses provided by HMRC (You can only do this if you work 25 hours a month or more from home).
|Hours of business use per month||Flat rate per month|
|25 to 50||£10|
|51 to 100||£18|
|101 and more||£26|
These flat rates do not include telephone or internet expenses which should be worked out by using the actual costs.
These figures can then form part of your expenses that you enter on your Self-Assessment tax return.
What should I do if I’m a limited liability partnership (LLP) member
Under most of the partnership structures used by our clients, limited liability partnership (LLP) members are taxed through the self-assessment system. In the absence of being remunerated through the Pay As You Earn (PAYE) system, it’s not possible to apply through the online system. But as you aren’t self-employed either, it usually has to be assessed on case-by-case basis. It’s therefore best to check with your Client Manager to what has been agreed with the LLP you have joined.
Still not sure? Get in touch with a member of the OC team.