Working from home – your employees can claim tax relief

Pound sign

HMRC have started writing to employers to tell them about tax relief available to employees for working from home.

Although they are writing to employers, this is a relief that employees must claim themselves directly from HMRC using the Tax Relief for Employees website. When employees make a claim, the tax they pay each month via your payroll will be reduced meaning that they receive more money.

The basic allowance is not much – only £6 per week from 6 April 2020. This gives basic rate taxpayers £1.20 of tax back per week, higher rate tax payers get £2.40. Employees might be able to claim more tax relief if they use their own money to buy things for their job. Employees will not be able to claim tax relief if their employer reimburses them.

With the increase in people working from home this year, HMRC have started a campaign to ensure that employees are aware. HMRC have reported that they have processed some fifty five thousand claims, out of approximately five million who could apply.

Employees who want to know more should visit HMRC where they can check their eligibility and make an online application. Alternatively contact us for more information on this and the other schemes to support business during coronavirus.

See our summary of the government’s Winter Economy Plan.

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