Did your employees work from home during the pandemic?

In the tax years 2020-2021 and 2021- 2022 millions of people across the UK worked from home and were therefore eligible to claim tax relief on additional household costs they incurred.

The rules around eligibility are unchanged, employees can use online service for claiming tax relief for working from home.   This additional portal was set up to cope with the extra demand and will be in place for tax years 2022 – 2023. However, the lifting of the pandemic restrictions mean that most employees will no longer be eligible to claim for working from home from April 2022 as they will not meet the eligibility criteria due to the return to the office in full, or in part.

How much they can claim.

You can either claim tax relief on:

• £6 a week from 6 April 2020 (for previous tax years the rate is £4 a week) – you will not need to keep evidence of your extra costs
• the exact amount of extra costs you’ve incurred above the weekly amount – you’ll need evidence such as receipts, bills or contracts

You’ll get tax relief based on the rate at which you pay tax.

If the employer has been making contributions up to or over the value of £6 a week then you cannot claim.

What employees can claim.

Employees can only claim for things to do with their work, such as:

• business phone calls
• gas and electricity for their work area

They cannot claim for things that they use for both private and business use, such as rent or broadband access.

You can read about the full rules at: Employer Bulletin: April 2022 – GOV.UK (www.gov.uk)

The HMRC have also recognised an increase in the number of employers offering hybrid working arrangements. They have updated their guidance within the Employment Income Manual to reflect this.

Amended guidance can be found at EIM31801, EIM31802, EIM31803.

They have also made amendments to guidance on the tax treatment of certain homeworking costs and equipment, as well as the homeworking deduction, to provide certainty of HMRC’s view on the application of such rules under hybrid working arrangements. The guidance at EIM21611, EIM01471, EIM01472, EIM32790, EIM32795 and EIM32810 has been amended.