Tax relief on job expenses

HMRC have updated their guidance for claiming tax relief on expenses relating to your employment when you work from home on a regular basis, to include the period of lockdown due to Coronavirus as being an allowable reason.

You may be able to claim tax relief for additional household costs if you have to work at home on a regular basis, either for all or part of the week. This includes if you have to work from home because of coronavirus (COVID-19). You cannot claim tax relief if you choose to work from home.

Additional costs include things like heating, metered water bills, home contents insurance, business calls or a 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 mortgage interest, rent or council tax.

You may also be able to claim tax relief on equipment you’ve bought, such as a laptop, chair or mobile phone.

How much you can claim

You can either claim tax relief on:

• £6 a week from 6 April 2020 (for previous tax years the rate is £4 a week) - you will not need to keep evidence of your extra costs
• the exact amount of extra costs you’ve incurred above the weekly amount - you’ll need evidence such as receipts, bills or contracts

You’ll get tax relief based on the rate at which you pay tax. For example, if you pay the 20% basic rate of tax and claim tax relief on £6 a week you would get £1.20 per week in tax relief (20% of £6).

HMRC will most likely change your PAYE tax code to provide this relief, meaning that the amount of tax you pay via your employment will be reduced by the value of the relief given.

In order to claim, you will need to log in to your Government Gateway account. Please visit https://www.gov.uk/tax-relief-for-employees/working-at-home for details.