If an employer requires an employee to work from home, the employee is entitled to claim under the working from home allowance, to cover increased costs, eg, heating and electricity.
HMRC states that to be eligible, the employee must
1. Be working from home because their work place deem it necessary;
2. Be working from home because they have been advised to self-isolate
The employee can work partly at home and partly at their place of employment and still be eligible.
The employee is entitled to claim a rate of £6 a week.
Two options, the employer can choose to pay it or the employee can make a claim to have their tax code adjusted:
1. Employers can pay £6 a week extra tax-free. Employers can give an allowance up to this amount and what they give is free from tax, so the employee gets it all.
2. Employees claim tax relief on £6 a week. If an employer is not in a position to pay the employee £6 a week for working from home, then an employee can ask for the amount to be deducted from their taxable income. To make the process easy, HMRC says that claims in line with the employers’ payment (ie, for £6 a week) will not need to be justified.
For this tax year only, it only needs to be claimed once, and it automatically claims for ALL of this tax year at the £6/week relief rate. That’s a gain of £62/year for basic rate taxpayers.
For an employee to make a claim HMRC has set up a new dedicated working-from-home microservice that will automatically apply the whole 2020/21 tax year’s relief via your tax code – making claiming the whole amount very easy.