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Employees reminded to claim work-from-home tax relief for new tax year

Employees working from home can continue to claim tax relief for costs not reimbursed by their employer, but will need to make a new claim for the 2021/22 tax year, it has been confirmed.

Throughout the coronavirus pandemic, it is not uncommon for employers to pay a tax-free allowance of up to £6 per week (£26 per month) to employees required to work from home.

This is used to cover the costs of bills, such as additional heating, telephone, and data usage.

But where employers do not cover such costs, employees can claim tax relief for the same amount by making a personal claim.

However, claims made in the 2020/21 tax year will not be rolled forward, meaning employees must make a new claim to continue receiving tax relief.

Commenting on the rules, the Institute of Chartered Accountants in England and Wales (ICAEW),  said a new claim will need to be made for the 2021/22 tax year.

“ICAEW understands that once the pandemic is over, these rules will revert to the previous position under which the allowance is tax-free only where paid by employers,” it added.

“HM Revenue & Customs (HMRC) has previously confirmed that the £6 per week/£26 per month is available in full, even if an employee splits their time between home and office (ie, the amount does not need to be pro-rated over the number of days spent each week at home and in the office.)”

The regulator also confirmed that employees who are currently working from home but return to the office later in the year do not need to notify HMRC of any changes, so the relief can continue to be applied to the whole of the tax year.