How to claim tax relief for working from home

Can I claim tax relief working from home?

In short, yes. If you have used your own money to buy items for work then you might be able to claim tax relief. However, if your employer has already refunded you or you rejected their offering for an alternative then you cannot claim relief. Furthermore, you must have paid tax in the year you are claiming. 

If you make a claim it must be done so within 4 years of when you spent your money. If your claim is for the current tax year that has not ended then HMRC will likely make adjustment through your tax code. 

How much can I claim?

This is dependent on the tax year because extra support has been introduced in light of COVID-19. For claims prior to 6 April 2020 £4 per week is available, and for claims after this date £6 a week. You do not need to share evidence of your spending. For extra costs you have incurred above this amount you will need to provide evidence e.g. bills and receipts. 

How much relief you’ll receive is dependent on the tax rate you pay. For example, if you pay the basic rate of 20% and claim £6 tax relief per week then you will receive £1.20 in tax relief for each week.

Expenses that can be claimed for tax relief

The are certain restrictions on what you can claim relief on. Here is some guidance on what HMRC deems acceptable: 

Uniforms, work clothing and tools

Relief might be available for: 

• repairing or replacing small tools you need for your job e.g. electric drill, scissors 
• cleaning, repairing or replacing specialist clothing e.g. safety boots

You can only claim relief when repairing, cleaning or replacing, not on the initial costs. If you were required to wear PPE for work then you should ask your employer to reimburse you as they are required to do that or provide PPE for you.  

Vehicles used for work – individuals 

Relief might be available for a vehicle you use to complete your work that you’ve bought or rented with your own money. This does not include travel to and from work. The relief available is based on mileage covered, not for things such as: electricity, road tax, MOTs, repairs or fuel.

To make a claim on this you will need to provide detailed records on your work trips and add up the total mileage. This total must exclude any costs that your employers has contributed which is often called a ‘mileage allowance’. 

Here are the approved mileage rates and corresponding reliefs:

Vehicles used for work - businesses

For work trip in a company car relief can be claimed on money you’ve spent on fuel and electricity. Keep receipts and records to show the actual cost of the fuel.

Travel

You cannot claim for travel to and from work but if you have to travel for work then you might be able to claim relief on: 

• Public transport costs
• Hotel accommodation
• Food and drink
• Congestion charges and tolls
• Parking fees
• Business phone calls and printing costs

Professional fees and subscriptions

If your job requires you to have subscription to professional bodies or societies and you have paid for an annual subscription then you might be able to claim relief. You cannot claim relief if:

• Your employer or someone else has paid for it 
• It is a lifetime subscription 
• The professional body is not approved by HMRC

Additional expenses that can be claimed if you're self-employed

If you’re self-employed you will have a greater number of operating costs that you could claim relief on if they are deemed ‘allowable expenses’.  

Office or property

Items that you’d generally use for less than 2 years are deemed allowable expenses, these could include for example: stationery, equipment such as computers, rent and insurance.

You cannot claim for anything that is not used for your business. 

Staff

The following staff expenses qualify for relief:

• staff salaries
• bonuses
• pension contributions
• benefits
• agency fees
• employer National Insurance
• Training courses for your business

Legal and financial costs

Legal: If you need to hire a professional such as a solicitor or an accountant then you can include this when calculating your allowable expenses (in most cases). You cannot claim on expenses incurred from breaking the law e.g. parking fines.

Financial: The following expenses are allowable: 

• Bank, overdraft and credit card charges
• Interest on business loans
• Hire purchase interest and leasing payments 
• Debts incurred from customers who haven’t paid and are unlikely to pay you

You cannot claim for repayments of loans, overdrafts and other finance agreements.

Marketing

Marketing expenses such as print adverts, bulk mail advertising, website costs etc. can be included in your allowable expenses. However events and client entertainment is not allowed. 

Reselling of goods

You can claim for: goods for resale (stock), raw materials and direct costs from making goods. However, depreciation and materials bought for non-business use are not claimable.

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Wondering where to start?

The list of items that qualify for tax relief is vast and there are many nuances. Calculating your expenses and determining what is allowable can be overwhelming, if you need support we’re happy to guide you.