Audience: Home-working employees
Since the pandemic accelerated the shift to home working, many employees have found themselves bearing costs they would previously have incurred only at the office — higher energy bills, increased broadband usage, and extra wear and tear on their homes. The good news is that HMRC offers tax relief to help offset some of these costs, though the rules are more nuanced than many people realise.
This guide explains exactly who qualifies for working from home tax relief, how much you can claim, and how to go about doing it.
The key eligibility criterion is that you must work from home because of the requirements of your job — not simply because you choose to. If your employer requires you to work from home, either all the time or on certain days, you may be eligible. If you work from home voluntarily or as a matter of personal preference when an office is available to you, HMRC's position is generally that you do not qualify.
There is also an important distinction between working from home on a regular basis and doing the occasional bit of work in the evenings or at weekends. The tax relief is intended for employees who genuinely perform their work duties at home, not for occasional out-of-hours emails.
Importantly, employees who are required to work from home under a formal arrangement — whether set out in their employment contract or agreed with their employer due to the nature of their role — have the strongest claim. If your employer has closed your regular workplace or there is no suitable office close to where you live, that also strengthens your position.
There are two main routes for claiming working from home tax relief. The flat-rate method is the simplest. HMRC allows a flat rate deduction of £6 per week (or £26 per month) without needing to provide any evidence of your actual costs. For a basic rate taxpayer, this means a tax saving of £1.20 per week or roughly £62 per year. For a higher rate taxpayer, the saving is £2.40 per week or roughly £124 per year.
Alternatively, you can claim your actual additional costs if they exceed the flat rate. To do this, you need to calculate the proportion of your household bills — electricity, gas, broadband — that relates to your work use. This requires some record-keeping and calculation, and HMRC may ask you to justify the figures if they seem unusually high. Most people find the flat rate simpler and perfectly adequate.
If you are a PAYE employee, you claim working from home tax relief through HMRC's online service. You can access this through your Personal Tax Account at gov.uk, or directly through HMRC's dedicated working from home claim portal. The process takes only a few minutes.
Once approved, HMRC will adjust your tax code to give you the relief. For example, if you are entitled to the £6 per week flat rate for a full year (£312), your tax code allowance will be increased by £312, reducing your taxable income by that amount. For a basic rate taxpayer, this results in £62.40 less tax per year.
Claims can be made for the current tax year and up to the previous four tax years, as long as you were working from home and eligible in those years. Given that many employees have been working from home since 2020, this represents a potentially significant accumulated refund for some people.
It is important to understand what working from home tax relief does not cover. It is not intended to reimburse the full cost of running a home office, and you cannot claim for things like mortgage payments, council tax, or the cost of furniture and equipment — unless your employer specifically provides these as a benefit.
You also cannot claim for costs that remain the same regardless of whether you work at home or not. The relief is specifically for additional costs that arise because of your home working — the extra heating and electricity used during working hours, for example, rather than the standing charge on your energy bill.
If your employer reimburses you for home working costs — for example, by paying you a tax-free allowance of up to £6 per week — then you cannot also claim the relief from HMRC. The two provisions are not stackable; they are designed as alternatives.
If your employer provides you with equipment to use at home — such as a laptop, monitor, keyboard, or desk chair — this can generally be done free of tax and National Insurance, provided the equipment is used mainly for work purposes and ownership does not transfer to you. HMRC takes a pragmatic view here, recognising that home workers need appropriate equipment to do their jobs.
If you have purchased your own equipment and your employer has not reimbursed you, you may be able to claim tax relief on the cost, provided the equipment is used exclusively for work. The rules here are fairly strict — purely personal use of equipment disqualifies the claim — so it is worth taking advice if the amounts involved are significant.
**Disclaimer: ***This article is for general information purposes only and does not constitute tax advice. Tax rules can change and individual circumstances vary. Always consult a qualified tax adviser or contact HMRC directly for advice specific to your situation.*