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Tax Free Allowance For Working From Home

If you are an employee, you may be able to claim tax relief for additional household costs if you have to work at home on a regular basis, either for all or part of the week. This includes if you have to work from home because of coronavirus (COVID-19). You cannot claim tax relief if you choose to work from home. You can claim a tax deduction of £6 per week or the actual costs incurred, if higher and can be substantiated. The amount of tax relief will depend on the rate at which you pay tax, up to £62.40 per year for a basic rate taxpayer or £124.80 for a higher rate taxpayer.

You can claim relief in your tax return if you complete one or use the online form here. If your employer has already paid you £6 a week through your wages, then you can’t make a separate claim.

If you have been working at home during 2020/21 and 2021/22, and have not yet made a claim then you should do so now. From 6 April 2022, the current relaxations will be removed and allowances will only be available to those with eligible homeworking arrangements.

If you are self-employed, you can calculate your allowable expenses using a flat rate, based on the hours you work from home each month. This means you do not have to work out the proportion of personal and business use for your home, for example how much of your utility bills are for business.

The flat rate does not include telephone or internet expenses. You can claim the business proportion of these bills by working out the actual costs.

For more information on allowances or to discuss your own circumstances, get in touch with our Private Client Taxperts via [email protected] or call your local office.

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