HMRC clarifies its approach on tax relief for home working

Employees claiming tax relief of £6 per week for the additional household expenses incurred for having to work from home can now obtain relief for the full 2020/21 and 2021/22 tax year. They can do this via the form P87 or by completing a  tax relief form if an individual doesn’t have other expenses to claim. The claim can be made by an employee as long as they’ve had to work at home for at least one day during the tax year and their employer has not reimbursed them any expenses for working from home.

A recent change in HMRC’s web form has provided guidance, stating that you can now apply for tax relief for the whole of the 2020/21 tax year and the 2021/22 tax year, even if you do not know how much longer you will be working from home, and you go back to your workplace before the end of the tax year (5 April).

If an employee was one of the 2 million people that claimed tax relief for working from home in the tax year ending 5 April 2021, they will need to submit a further claim for relief to cover the period ending 5 April 2022. If an employee claimed for the relief in 2020/21 and wish to claim for 2021/22, they should first check their tax code for the current year before submitting a new claim as HMRC have retained the benefit in some tax codes for the 2021/22 tax year. The increased tax code will show £312 added to the existing personal allowance.

There has been some confusion recently as employees have been unsure whether they could claim tax relief while their office was open but subject to reduced numbers on site to maintain social distancing measures. The new web form has helped clarify this position. It will also mean that HMRC don’t need to police the dates at which staff return to the office full time.

HMRC confirmed that employees could claim the same relief via their self-assessment tax return for the 2020/21 tax year and we expect they will confirm the same for 2021/22 in due course.