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Claiming the costs of staying at home

Author: Naomi Cowan

Tags: Quarterly update - November 2020

For those of us working from home due to the Covid-19 pandemic, it looks like this new way of working may be here to stay for the foreseeable future.

But with all that extra heating and lighting to pay for, do you know the rules of being able to claim for these added home expenses?

Under normal circumstances, HMRC permits employees who are required to work from home to claim £6/week (£26/month) as a deductible expense against their employment income if there is a home working agreement in place and they don’t receive the full homeworking allowance from their employer.

Because of the Covid-19 restrictions, for this year only, if you have worked from home for even just one day (regardless of part-time v full-time employment – the deduction doesn’t need to be pro-rated), you are able to claim an entire year’s worth of expenses.  The reason being that it makes the process simpler and cheaper for HMRC in the long run.

From April 2021, home working expenses allowance will revert back to the original rules (i.e. dependent on how many days you have worked from home).

HMRC is now actively encouraging employees to make claims for their homeworking costs via a new online portal. HMRC says 54,000 people have already made a claim. The online claim will alter the employees PAYE code so the relief is given at source for the rest of the tax year. Alternatively, employees can claim in their self-assessment tax return or by submitting a P87 form.

For more advice on working from home allowances, speak to your local AIMS Accountant.