How to claim the working from home tax relief

If you were told by your employer to work from home during the pandemic, even for just one day, you can apply for tax relief up to £140 per tax year to cover extra costs such as broadband.

Some workers will also be able to claim for this tax year too, giving them up to £420 in tax relief.

What is WFH tax relief?

While commuting costs have fallen, other bills such as gas, electricity, and internet will likely have risen if you have had to spend more time working from home. To help cover these extra costs, HMRC allows you to claim tax relief using its designated online portal. Last year, this scheme helped three million people.

How much tax relief will I get?

There are two ways of getting tax relief. Either your employer can cover your expenses and pay them into your wages tax-free or you can claim tax relief directly from HMRC.

If you do claim yourself, how much you will get depends on the rate of income tax you pay:

• Basic-rate taxpayers get £1.20 a week.

• Higher-rate taxpayers receive £2.40 a week.

• Top-rate taxpayers will receive £2.70 a week.

Furthermore, if you didn't claim for the last tax year, or the one before, but working from home, you can backdate your claim. HMRC has confirmed that you have until 5 April 2025 to make claims for the 2020/21 tax year, and 5 April 2026 to make claims for 2021/22.

Whilst some workers may be able to claim for the current tax year, it is no longer a legal requirement to work from home making it a lot more difficult to apply for tax relief for 2022/23. One of the following must apply:

• You can’t perform your job on your employer’s premises because they don’t have the facilities; for example, your employer has a small office with no space for you to work on the premises

• Your job requires you to live so far from your employer’s premises that it would be unreasonable for you to travel there every day; for example, your employer’s premises are in Newcastle but your job requires you to work in Scotland

• Or government restrictions mean you must work from home; though these restrictions have now been removed so can no longer be applied for this tax year

If you are in receipt of the work-from-home tax rebate, your tax code will change. The most common tax code for the 2022/23 tax year is 1275L. The number presents the personal tax allowance for most earners of £12,750. As a result, this will change if you have a larger personal tax allowance due to claiming WFH relief.

If you are only making a claim for previous years, then HMRC will issue a tax refund, typically in the form of a cheque.

Who is eligible for tax relief?

To check if you were eligible for tax relief you:

• We're told to work from home by our employer. You cannot claim tax relief if you chose to work from home

• Have had to pay higher costs related to working from home (but you don't need to show evidence of this)

• Must not be receiving expenses directly from your employer to over the extra costs of working from home

If you pay tax by self-assessment, you can claim the tax rebate through the tax return rather than HMRC online portal. If you are self-employed, you can't claim because you work for yourself, although you can claim expenses on your tax return.

How do I claim the tax relief?

To claim the working from home tax relief:

• Head to the government’s microservice portal and answer the eligibility questions

• During this process, you also be asked about other work-related expenses that you could claim for too

• You need your Government Gateway ID to proceed with your application – if you don’t have one, you can create one during the process and will need

  • your national insurance number

  • most recent P60, driving license or a valid UK passport

• Once logged in, state the date that you started working from home

• If you have been working since the start of the first lockdown (23 March 2020) put that date in and you will get a rebate for two whole tax years (6 April 2020 to 5 April 2021 and 6 April 2021 to 5 April 2022) and the two weeks extra

• If you have already claimed for the 2020/21 tax year, you will not automatically receive a refund for the 2021/22 tax year. You must again use the microservice portal to apply.

What if the rebate doesn't cover my extra needs?

If the sum provided does not come to close to the extra costs that you have incurred, you can apply for relief on higher sums.

There are two options:

• If you complete a self-assessment form each year simply add the claim to that

• Fill in the P87 form that allows workers to claim back expenses up to a maximum of £2,500

HMRC says that additional costs include things such as:

• Heating

• Metered water bills

• Home contents insurance

• Business calls

• New broadband connection

They do not include costs that would stay the same whether you were working at home or in an office, such as rent or council tax.

You will need:

• Your employer’s name and PAYE reference (which you can find on your payslip or P60)

• Your job title

• Receipts (to provide evidence of these extra costs)

You won’t get back the full cost of the extra expenses, only tax relief on the total. For example: if you have spent £500 on extra costs, as a basic-rate taxpayer, you will see your net wages increase by 20% or £100.