In the last week, the Government has updated it’s advice in relation to employees who are required to work from home as a result of COVID-19.

If you have asked your employees to work from home, and you have not reimbursed them already, your employees may be entitled to claim tax relief on additional household expenses they have incurred, such as heating and lighting.

 

  1. What Can Employees Claim?
  • Under new rules, employees can claim a £6 per week (£26 per month) allowance from 6th April 2020 where they are:
    • paid tax-free by employers; or
    • during the pandemic, employees can claim a deduction from earnings for this allowance
  • For claims pre-dating 6th April 2020, employees can claim a fixed amount of £4 per week;
  • Alternatively, employees can claim relief on the actual amounts incurred, subject to being able to provide evidence, such as phone bills.

 

  1. What Is The Allowance Intended To Cover?
  • The allowance is to cover tax-deductible additional costs that employees who are required to work from home have incurred, such as heating and lighting the workroom, and business telephone calls.

 

  1. How Does My Employee Make A Claim Against Their Tax Affairs?
  • Employees who are not reimbursed by their employer can claim this allowance as a deduction from their earnings in their tax returns (self assessment return or a postal form P87) or via the government gateway to claim tax relief in-year for 2020/21 through their personal tax code number.
  • To find out which route to use, employees are encouraged to visit HMRC’s new online claims checker.
  • It is currently understood that these rules will revert to the previous position under which the allowance is tax-free only where paid by employers when the pandemic is over.

 

  1. Can Employees Make A Claim When They Are Working Both From Home And At The Workplace?
  • HMRC has confirmed that the £6 per week/£26 per month is available in full, even if an employee splits their time between home and office
  • The employee is not required to pro-rata their claim over the number of days spent each week at home and in the office.

 

  1. Is There A Time Limit To When The Employee Can Claim?
  • Claims will not be rolled forward so, if applicable, a new claim will be needed next year.