How To Claim Tax Back For Working From Home

Did you know that if your employer requires you to work from home, you can claim tax back to help you to cover costs such as extra heating and electricity?

This isn’t a new initiative, but with millions of people having to work at home right now due to Coronavirus, many more people are likely to be eligible.

Of course, working out exactly how much money you’re spending during your working hours on utilities and associated costs would be quite tricky business.

So to make things simple, as of Monday 6th April 2020 (the start of the new tax year), you can claim a flat rate of £6 per week. For the previous tax year, it was £4 per week.

Please note: All the details here have been fact checked against official HMRC guidelines, but how things will translate into practice during these times remains to be seen. This post will be updated if and when new information emerges. 

You’ve got two options when it comes to making your claim…

1. Your employer can pay you an extra £6 per week, tax free

Your employer can give you an allowance of up to £6 per week. This sum is tax free, so you’ll get to keep every penny.

In many circumstances, you’ll just need to speak to your employer to get this sorted.

With many businesses struggling right now though, you might not feel comfortable having this conversation.

Don’t worry though, because you can make a claim yourself…

2. You can claim tax relief via HMRC on £6 of your income per week, which for basic 20% taxpayers equals £1.20 per week, and for higher 40% taxpayers equals £2.40 per week

You won’t have to provide any evidence of your extra expenses, so you don’t need to fuss over receipts and records, and it’s a simple case of filling in a form.

This is the least desirable option as it means less money in your pocket, but let’s face it, it’s better than nothing.

You can claim via your self-assessment tax return if you’re already required to file one (so if you also have self-employed income), but most people will need to complete a P87 form.

You can complete the P87 form online, or you can fill out a postal form.

To complete the form online, you’ll need a Government Gateway user ID and password. If you don’t already have these, you can set them up in about 10 minutes.

You’ll need to know your employer’s name and PAYE reference (which you’ll be able to find on your payslip or on your P60), as well as your job title. For the postal form, you’ll also need to know your National Insurance Number.

The part of the form that’s relevant here is titled ‘Using your home as an office’, and assuming that you’re not eligible for any other of the items on the form, you can just leave those blank.

You’ll have two figures that you’ll need to input on the form, when completing the online version:

• ‘Amount paid by you’: If you’ve had increased costs due to working from home, simply enter £6 per week x the number of weeks that you’ve been required to work from home
• ‘Amount paid to you by your employer’: If you’re not receiving any reimbursement or allowance from your employer to cover your work from home expenses, then just enter ‘£0’.

The postal version of the form is slightly different, and you’ll need to enter ‘Using your home as an office’ yourself in the ‘Other expenses’ section.

FAQs about claiming tax back for working from home

Q. When should I make my claim? 

A. You can claim at any time retrospectively, so if you’re working from home due to Coronavirus, it’s probably worth waiting until you’re back in your usual workplace before you make your claim, just to cut down on the amount of admin that you have to do.

Q. How will I receive my money? 

A. In most cases, you probably won’t receive a cash refund. It’s likely that your tax code will be adjusted, so you’ll pay less tax over the course of the year.

Q. How long will it take to process my claim? 

You might hear back within a few weeks. It’s important to note though that HMRC is of course under huge pressure at the moment, so it may well take longer.

Q. I was working from home for a few weeks before the start of this tax year. Can I claim for those? 

A. Yes. You’ll have to claim for different tax years separately.

Q. I don’t pay tax because I earn under the threshold. Can I still claim? 

A. Your employer can choose to pay you £6 per week tax free. Unfortunately though, if they don’t, you can’t claim the tax relief back from HMRC simply because the tax was never incurred.

Q. My partner is also working from home. Can we both claim?

A. Yes.

Have you made a claimed tax back yet for working from home? Do you know the outcome yet? Leave a comment and let us know.