Working from home allowance
Money Saving Expert have published the following notes and guidance regarding the working from home allowance:
If your employer requires you to work at home, you can – and always have been able to – claim for increased costs due to working from home, eg, heating and electricity.
Clearly, right now many firms have closed workplaces (again) and that means across the UK millions of staff are temporarily required to work from home, even if it’s just for part of the week. Therefore you’re eligible to claim if you’ve had increased costs due to it. HM Revenue & Customs (HMRC) has specifically confirmed that claims from employees working at home due to coronavirus measures, if their usual workplace is closed, count.
But apportioning extra costs such as heating and electricity is tough. So instead you can, in simple terms, claim a rate of £6 a week. There are two ways to do this:
- Employers can pay you £6 a week extra tax-free. Employers can give you an allowance up to this amount and what they give you is free from tax, so you get it all (to give you more, it will need to make special arrangements).
But right now – with many firms struggling – asking may be bad timing, so instead you can…
- Claim tax relief on £6 a week. If your employer won’t pay expenses for your extra costs due to necessary working from home, but you have them, then you can ask for the amount to be deducted from your taxable income. To make the process easy, HMRC says that claims in line with the employers’ payment (ie, for £6 a week) will not need to justify that figure – meaning you won’t need to keep receipts or prove information. Tax relief of £6 a week equates to a gain of £1.20 a week for a basic 20% rate taxpayer, £2.40 a week for a higher 40% rate taxpayer.
If you believe you have higher increased costs than £6 a week, you can claim more, but you will need evidence of the cost increases and be able to apportion these specifically to the fact you are working from home – and this becomes a much more laborious process.