Working From Home Tax Relief: What You Can Claim

Tax Queen

Tax Expert @ Pie

4 min read

Working from home Tax relief details allowable homeworking deductions, simplified expense flat rates, and actual cost allocation rules regulated by His Majesty’s Revenue and Customs. UK self-employed individuals and sole traders working from home can claim allowable expenses either using HMRC simplified expense flat rates based on monthly hours or by calculating actual household running costs. Simplified rates range from £10 to £26 per month depending on hours worked, covering utilities, heating, and lighting without receipt tracking. Alternatively, actual cost claims allocate a fair proportion of rent, mortgage interest, council tax, and energy bills based on workspace area and usage time. Utilising Open Banking tax applications like Pie simplifies working from home deductions by categorising household bills, calculating optimal relief methods, and submitting complete Self Assessment returns directly to HMRC.

Let’s Dive In

Working from home could put money back in your pocket through tax relief. Since the pandemic, millions of Brits have switched to remote working, bringing additional costs with it.

These additional costs include heating your home during the day, using more electricity, and keeping your internet running. Fortunately, HMRC offers working from home tax relief to help cover these costs.

You might be able to claim up to £312 per tax year - and surprisingly, you could qualify even if you only worked from home for a single day during that period. Let’s explore what this means for you.

And if you're unsure where to start, we can help you make a claim quickly and correctly to ensure you don’t miss out.

What Does Working From Home Tax Relief Actually Mean?

Working from home tax relief is HMRC’s way of helping you with the extra household costs you face when working remotely. It’s specifically for employees who must work from home as part of their job or were instructed to by their employer.

These tax reliefs, introduced during the Covid-19 pandemic, aim to offset additional household expenses incurred due to remote work, such as heating and electricity bills. The relief covers increased expenses like heating bills, electricity costs, and internet charges that rise because you’re home during work hours. For most people, it works out as a flat rate of £6 per week (or £312 per year).

woman in a white blazer and glasses laughs warmly while seated at a desk with a laptop, in a bright sunlit room.

Who Can Claim This Tax Relief?

You can claim if your employer requires you to work from home, including if you were told to work from home during COVID restrictions. Hybrid workers who split time between home and office can also claim for their home working days.

If working from home is a choice made in agreement with your employer and specified in the employment contract, you may not qualify for tax relief, particularly for the 2024/25 tax year.

Remember that you can’t claim if working from home is entirely your choice rather than your employer’s requirement. The key factor is whether you’re required to work remotely.

Home Office Expenses and Tax Relief

When claiming tax relief for working from home, it’s essential to understand what expenses are eligible. HMRC allows employees to claim tax relief on additional household costs incurred while working from home. These expenses can include:

Electricity and gas bills
Internet and phone bills
Home office equipment and furniture
Stationery and printing costs
Business use of a home computer or laptop

To claim tax relief on these additional household costs, employees must keep accurate records of their expenses, including receipts and invoices. This ensures that you can substantiate your claim if required. However, for those who prefer simplicity, HMRC offers a flat rate of £6 per week in tax relief. If you decide to generate extra side revenue by selling old equipment or office furniture that you no longer need, checking the official guidelines regarding tax on secondhand sales will clarify whether your online trading falls within commercial reporting brackets.

How Much Money Could You Get Back?

The standard claim is based on £6 per week (£312 per year), but how much tax relief you actually receive depends on your tax band. Basic rate taxpayers (20%) get £62.40 per year in tax relief.

Higher rate taxpayers (40%) receive £124.80 per year, while additional rate taxpayers (45%) get £140.40 per year. The amount of relief varies based on your income tax relief rate. If your actual costs are much higher, you can claim the exact amount instead.

For higher claims, you’ll need evidence and calculations to back this up. Don’t forget you can claim for up to four previous tax years too, potentially multiplying your tax savings. If you discover that your employer has been applying an incorrect code to your salary throughout these distant periods, reviewing a comprehensive guide to claiming overpaid taxes will help you retrieve your money directly from the revenue.

How Do You Apply For The Tax Relief?

Applying to claim relief is straightforward through the GOV.UK website. You’ll need a Government Gateway user ID and password, which you can set up if you don’t have one already.

The online application takes about 10-15 minutes to complete. For most people paid through PAYE, HMRC will adjust your tax code so you pay less tax each month rather than getting a lump sum. Eligibility criteria for claim relief include working from home and incurring additional costs, with flat-rate allowances available for those who meet the requirements. Modern payroll technology has advanced significantly, and utilizing predictive AI tax recommendation systems allows you to automatically assess your outgoings and receive tailored guidance to lower your annual liabilities.

Self-employed workers will claim these expenses through their Self Assessment tax return instead. Once approved, the relief is typically applied to your current and future pay.

What Proof Do You Need For Your Claim?

For the standard £6 per week claim, you don’t need to provide receipts or evidence of extra costs. You might need to show that your employer required you to work from home - an email or letter from them would suffice.

It is important to understand the tax relief eligibility criteria, which have shifted from pandemic-related allowances to a more structured scheme. Specific conditions must be met to qualify for tax relief.

Previous utility bills can help you demonstrate the difference in costs when working from home versus not. This evidence becomes particularly important if you’re claiming above the standard rate.

woman with curly hair sits cross-legged on the floor, smiling as she works on a laptop in a minimalist, light-filled room with a cork board and small flower vase nearby.

Cannot Claim Tax Relief: Exceptions and Exclusions

While many employees are eligible to claim tax relief for working from home, there are some exceptions and exclusions to be aware of. You cannot claim tax relief if:

Your employer reimburses you for all expenses incurred while working from home.
You choose to work from home voluntarily, rather than being required to do so by your employer.
You are self-employed, as you can claim expenses on your self assessment tax return instead.
You are claiming expenses that are not exclusively for work purposes.

Deadlines and Time Limits

When claiming tax relief for working from home, it’s essential to be aware of the deadlines and time limits. Employees can claim tax relief for the current tax year and up to four years after the end of the tax year. For example:

For the 2020/21 tax year, employees have until April 5, 2025, to make a claim.
For the 2021/22 tax year, employees have until April 5, 2026, to make a claim.

woman lies on her stomach on a bed, laughing while typing on a laptop in a bright, cozy room.

Final Words

Working from home tax relief is a simple way to get back some of the extra costs of remote working. The online application is quick and easy through HMRC’s portal. If you meet specific criteria, you may also be eligible for a tax rebate, which HMRC adjusts through your tax code.

Remember to check if you can claim for previous tax years too - you might be owed more than you think! If you regularly support philanthropic causes from home, learning how to claim back charity donations tax is another brilliant way for higher rate taxpayers to maximize their personal allowances while giving back to the community. With the process being so straightforward, there’s no reason not to claim if you’re eligible.With the process being so straightforward, there’s no reason not to claim if you’re eligible. Upon approval of your claim, you could receive a tax refund from HMRC, typically in the form of a cheque.

Pie is the UK’s first personal tax app designed to help working individuals reduce their tax burdens. As the only self assessment solution offering built-in bookkeeping, real-time tax figures, easy tax return processing, and timely expert advice, Pie makes managing your taxes simpler than ever. Why not check out Pie today to see how else they could help with your tax affairs?

Quick and Easy Guide to Add Work from Home Allowance

Follow these steps to add work from home expenses

Step 1

Add your expenses by swiping right on eligible work from home expenses you want to declare on your tax return. You can also use the proportion feature, which auto-calculates the percentage of the expenses used for work or personal expenses.