Q: Can I claim the work from home allowance?
This is a question we’ve been asked a lot recently and so we asked our Senior Tax Manager, Lucy Orrow to answer in more detail
For the 2021/22 tax year, HMRC allowed reimbursements of £6 per week/£26 per month as a work from home allowance (without the need to provide supporting paperwork) linked to the Covid-19 pandemic. In tax years prior to 2021/22, HMRC allowed reimbursements of £4 per week. Will HMRC revert to an allowance of £4 per week for the 2022/23 tax year?
From 6 April 2023, the blanket relief for working from home, which was introduced at the start of the pandemic, when we were all asked to ‘work at home’, will cease. The benefit rate of £6 per week or £26 per month remains but we revert to the old rules.
These rules enable the relief to be claimed where you work at home on a regular basis but not because you choose to work from home. I would normally expect the employee’s contract to include reference to regular working from home.
It is advisable to have this in writing and does not need to be for all employees so adjusting the contract or writing a letter confirming your agreement would be helpful – this stops the occasional work from home exceptions, so taking work home in the evening or needing to be there for the builder, for example would not be eligible.
It will also be calculated on when they are working from home so for example, if the employee works from home 2 days per week, then the full £6 per week, for the year, can be claimed. However, if the requirement is to work from home only one week per month, then only 12 x £6 can be claimed in the year. The Covid rules allowed for the relief to be claimed for the whole year, irrespective of how long they actually worked from home.
The employer can choose to pay this amount as a tax free element in the payroll or the employee can claim it online or via the Self-Assessment Tax Return.
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.