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Home working tax relief warning

Employees who have been claiming home working tax relief during the pandemic should review their tax codes to check whether HMRC has included the relief in their notice of coding

During the pandemic HMRC allowed anyone working at home due to the pandemic lockdowns to apply for the tax relief for the whole year regardless of how many days they worked at home, but this relaxed interpretation of the rules was only in place until the end of the tax year.

Employees should be reviewing their PAYE tax codes to clarify whether HMRC have included the home office relief within the notice of coding. If it is still included and they are no longer eligible for the relief HMRC should be contacted so it can be corrected. If not employees may have additional tax to pay at the end of the year.

The government relaxed the rules regarding home office working and the associated eligibility for claiming home office relief for the 2020-21, 2021-22 and 2022-23 UK tax years. In effect, due to Covid, people can claim the £6 per week tax relief in full for each of these tax years, where they simply were required to work from home for a limited period in each of these tax years.

This was a temporary relaxation of the rules on the part of HMRC. As such, the home office relief is only available from 6 April 2022 onwards, if your employer specifically requires you to work from a home office, eg, to stop the spread of Covid or because your job has been ‘relocated’ and now is contractually regarded 100% as a home office role.’

This means that the popular hybrid working arrangements where staff spend Tuesday to Thursdays in the office and work the remaining two days at home will not qualify as this is only flexible working.

The updated HMRC guidance from 6 April 2022 states: ‘You can claim if your employer has not already paid your expenses and you have additional household costs as a result of working from home.

One of the following must also apply:

  • there are no appropriate facilities available for you to perform your job on your employer’s premises;
  • the nature of the job requires you to live so far from the employer’s premises that it is unreasonable for you to travel to those premises on a daily basis;
  • you are required, under government restrictions, to work from home.

To claim tax relief, you cannot have just chosen to work from home.

If you have further questions contact AJR & Co Ltd.