Claiming tax relief for working from home
In light of the COVID-19 pandemic, many people have found themselves working from home in the longer term. Some people may be eligible to claim tax relief for some of the expenses they incur. Our tax super-team can guide you through the intricacies of claiming tax relief for working from home, because not everyone can apply.
For employees to be eligible for tax relief, you must meet certain criteria. Firstly, you must have been required to work from home by your employer - perhaps because you work a long way from your office, or your company doesn’t have an office. The rules are different for self-employed people, which is why it’s important to seek advice. Additionally, your home workspace must meet the definition of a "dedicated workspace," which means it is a place used solely or primarily for work purposes. Our band of dedicated ‘client protectors' warns against trying to claim in less tangible situations.
Expenses You Can Claim
There are two methods for claiming tax relief: the flat rate method and the actual cost method. The flat rate method allows you to claim a fixed amount per week without the need for detailed record-keeping. For the tax year 2022/23, the flat rate is £6 per week. This would equate to £1.20 per week in tax relief.
Alternatively, our fiscal superheroes say you can claim tax relief based on the actual costs you incurred while working from home, such as heating, electricity, and internet expenses. But, this is not as generous as it sounds! To claim using the actual cost method, you will need to maintain detailed and accurate records and you cannot claim for more than is deemed necessary for the work you do; you are never able to claim 100% of your bills, for example. Over-claiming can result in penalties, so it’s best to get good advice from someone who is watching out for you - before you start.
Claiming tax relief for working from home can be complicated, especially if you choose the actual costs method.
Before claiming tax relief, you need to know a few important factors, one of which is that you cannot claim tax relief if your employer has already reimbursed you for the same expenses. We cannot stress enough that it is sensible to consult with a tax hero who is looking out for your best interests and will ensure you fully understand the latest regulations and how they are applied.