How to claim the working from home tax relief

Were you told by your employer to work from home during the pandemic? If so you can apply for tax relief up to £140 per tax year.

Some workers will be able to claim for this 2022/23 tax year too, giving them up to £420 in tax relief. The money is to cover extra costs such as higher heating and broadband bills. Don’t worry if you have yet to claim as the HMRC deadline is a couple of years away.

In the article, we explain:

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What is WFH tax relief?

As a result of the pandemic, millions of people were told to work from home by their employers over the past couple of years.

While commuting costs will have fallen, other bills such as your gas, electricity and internet are likely to have increased as a result of you spending more time at home.

To help cover these extra costs, HMRC allows you to claim tax relief. You can do so using a designated online portal.

Around three million people made a claim for the entire 2020/21 tax year.

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How to claim working from home tax relief

To claim for the working from home tax relief:

• Head to the government’s microservice portal and answer the eligibility questions
• During this process you also be asked about other work-related expenses that you could claim for too
• You need your Government Gateway ID to proceed with your application – if you don’t have one, you can create one during the process and will need
  • your national insurance number
  • a recent payslip or P60 or a valid UK passport
• Once logged in, state the date that you started working from home
• If you have been working since the start of the first lockdown (23 March 2020) put that date in and you will get a rebate for two whole tax years (6 April 2020 to 5 April 2021 and 6 April 2021 to 5 April 2022) and the two weeks extra
• If you have already claimed for 2020/21 tax year, you will not automatically receive a refund for the 2021/22 tax year. You must again use the microservice portal to apply.

NOTE: If you do self-assessment, you won’t be able to use HMRC’s online portal; instead apply for the tax relief in your tax return. 

How is the tax relief paid?

You can backdate a claim to cover the first tax year of the pandemic (2020/21) and the two weeks before as well as the second year (2021/22), if you have been working at home since the first lockdown was announced on 23 March 2020.

Where an employee meets the criteria to claim tax relief for working from home and makes a claim for previous years, HMRC will issue a tax refund.  This is usually in the form of a cheque.

If you are claiming for the current tax year then you will pay less tax when you are paid. This means your tax code will change.

How much tax relief will I get?

There are two options to getting the tax relief:

1. Your employer: can cover your expenses and pay them into your wages tax-free
2. You claim: given the difficult time that many businesses have faced, you are more likely to claim tax relief from HMRC instead of your employer covering the costs

NOTE: You can’t do both. You will be unable to claim tax relief if your employer is paying your expenses.

If you do claim yourself, how much you will get depends on the rate of income tax you pay:

• Basic-rate taxpayers get £1.20 a week (tax relief of 20% on £6) = £62.40 per tax year
• Higher-rate taxpayers receive £2.40 a week (tax relief of 40% on £6) = £124.80 per tax year
• Top-rate taxpayers will receive £2.70 a week (tax relief of 45% on £6) = £140.40 per tax year

If you didn’t claim for last tax year or the one before but worked from home, you can backdate your claim. This means you would get up to two full years’ payment as a lump sum in your next salary.

If you are eligible to claim for the current tax year too, that’s three years of tax rebates, meaning:

• Basic-rate taxpayers could receive as much as £187.20
• Higher-rate taxpayers could get up to £374.40
• Top-rate taxpayers could receive up to £421.20

HMRC will accept backdated claims for up to four years.

Working-from-home tax relief is an individual benefit, so a couple or a group of flatmates can all claim it if you are all working from home.

You can use our income tax calculator to work out your payments.

What is the deadline to apply for WFH tax relief?

If you worked from home during the 2020/21 and 2021/22 tax years but failed to apply for the rebate, you can still do so. HMRC says it has no plans to close the online portal or microsite.

Claims can be backdated, meaning that you may be eligible for up to £280 tax relief if you claim for both last tax year and the one before (essentially the two years during the pandemic). Few workers will be able to claim for the current tax year.

HMRC confirmed that you have until the 5 April 2025 to make claims for 2020/21 tax year, and until 5 April 2026 make claims for 2021/22.

Can I still claim for working from home tax relief in 2022/23 tax year?

Some workers will be able to claim for the current tax year. But many people won’t be eligible for this tax year as it is no longer a legal requirement to work from home.

You can claim if you have additional household costs as a result of working from home and your employer has not already paid these extra expenses.

In order to claim for this tax year, which started on 6 April 2022, one of the following must apply:

• You can’t perform your job on your employer’s premises because they don’t have the facilities; for example, your employer has a small office with no space for you to work there
• Your job requires you to live so far from your employer’s premises that it would be unreasonable for you to travel there every day; for example, the workplace is in Birmingham but your job requires you to work in Scotland
• Or government restrictions mean you must work from home; though these restrictions have now been removed so can no longer be applied for this tax year

To claim tax relief, you cannot have just chosen to work from home.

HMRC also warned that employers who simply tell employees to work from home may not be sufficient to claim tax relief. So if you are hybrid working (that is, working from home for part of the week), you can only claim tax relief if there is a lack of appropriate facilities on your employer’s premises to do your job.

The government has outlined several examples where staff can claim working from home tax relief.

If you do meet the criteria for this tax year you could be entitled to as much as £420 in pandemic-related tax relief when you include the past two tax years.

Does my tax code change if I work from home?

Yes, if you are in receipt of the work-from-home tax rebate then your tax code will change.

You can usually find your tax code on your pay slip. The most common tax code for the 2022/23 tax year is 1275L. The number represents the personal tax allowance for most earners in the UK, which is £12,750 – this is the amount you can earn in a year tax-free.

So if you’re in receipt of the tax rebate, this code will change to reflect the fact that you have a larger personal tax allowance. Although bear in mind that this number could be different for other reasons, such as if you’re receiving a different tax benefit like a company car.

If you have claimed the working from home tax benefit in the past and you’re no longer eligible, you should check your PAYE tax code to ensure you’re not still receiving it.

It’s important to check because if you continue to claim while no longer eligible, you will be forced to pay additional tax at the end of the tax year.

If you are receiving the working from home tax rebate when you shouldn’t, get in touch with HMRC to get your tax code changed.

Who is eligible for tax relief for the last two tax years?

Not everyone is eligible to claim for the last two tax years so you need to check first that you:

• Were told to work from home by your employer. You cannot claim tax relief if you chose to work from home
• Have had to pay higher costs related to working from home (but you don’t need to show evidence of this)
• Must not be receiving expenses directly from your employer to cover the extra costs of working from home

Do you pay tax by self-assessment? You can still claim the tax rebate but you need to apply for it in your tax return rather than through HMRC’s online portal.

If you are still unsure whether you are eligible, there is a government tool that can help you find out.

NOTE: If you are self-employed, you can’t claim because you work for yourself. However, you can claim expenses on your tax return.

If you are new to tax returns, check out our guide to self-assessment.

What if the rebate doesn’t cover my extra needs?

If the sum provided does not come close to the extra costs that you have incurred, you can apply for relief on higher sums.

There are two options:

• If you complete a self-assessment form each year simply add the claim to that
• Fill in the P87 form that allows workers to claim back expenses up to a maximum of £2,500

HMRC says that additional costs include things such as:

• Heating
• Metered water bills
• Home contents insurance
• Business calls
• New broadband connection

They do not include costs that would stay the same whether you were working at home or in an office, such as rent, council tax, or your chocolate digestive habit.

You will need:

• Your employer’s name and PAYE reference (which you can find on your payslip or P60)
• Your job title
• Receipts (to provide evidence of these extra costs)

You won’t get back the full cost of the extra expenses, only tax relief on the total. For example: if you have spent £500 on extra costs, as a basic-rate taxpayer, you will see your net wages increase by 20% or £100.