Relief for some of your household expenses can be claimed if you are “required” to work from home by your employer. The relief is not available if working from home is your choice. To qualify, there must be some sort of home working agreement under which regular work from home is required. No relief can be claimed for occasional working at home or for informal arrangements such as, for example, work done at home in the evenings or at weekends.
If you are required to work from home, you can claim a proportion of your household running costs as an allowable expense. The proportion is often calculated based on the number of rooms in the house and the amount of time that a particular room is used for work.
Coronavirus special rules
While national lockdown rules were in place, HMRC recognised that many employees were required to work from home and announced that claims of up to £6 per week would be accepted for individuals required to work from home because of Coronavirus. These rules do not apply after 6 April 2022.
Home working arrangements: reimbursement by the employer
If you are not “required” to work from home but have an arrangement with your employer that you will work regularly from home, some different rules apply. Such arrangements would typically be in writing. These rules permit the employer to reimburse some costs or provide certain equipment for the employee without creating a tax liability for the employee.
These rules only apply to the reimbursement of costs by an employer and if they are followed, no tax liability will arise on the reimbursement. Individual claims cannot be made. The rules cover:
- Reimbursement of additional household expenses
- Provision of office equipment and computers for private use by employers
- Travel for necessary attendance
Reimbursement of household expenses
Employers may reimburse employees for the additional household expenses incurred through regularly working at home. The relief covers, for example, heating and lighting costs, additional insurance, metered water, telephone or internet access charges. Where working at home leads to a liability for business rates, this can be included.
Costs that are the same, whether you work at home or not, cannot be included. Specifically, this includes mortgage interest, rent, council tax and water rates.
Also excluded are the reimbursement costs that put you, as an employee, in a position to work at home. This would include expenses such as building alterations, furniture or office equipment. However, office equipment and furniture can be provided by your employer, which we will cover in a later section.
HMRC accepts reimbursements up to £6 per week without the need for supporting paperwork. If reimbursements are higher than this, they must be justified and detailed records must be kept by the employee, or they must be specially agreed with HMRC
Provision of office equipment and computers for home workers
Employers can provide office furniture, equipment and internet connections that are necessary for a homeworker, so long as the sole purpose of the equipment is to enable to employee to perform their work duties, and the private use of what is provided is insignificant. If the conditions are met, no tax liability arises.
Travel for necessary attendance
Where the employer requires an employee to make a journey to or from a place they have to attend in the performance of their duties, but the journeys are not ordinary commuting or private travel, the employer can reimburse the cost of travel without creating a tax liability for the employee
There is further guidance on homeworking expenses here: https://www.gov.uk/tax-relief-for-employees/working-at-home
