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Last updated: 3 Mar 2021

Spring Budget 2021: Tax and National Insurance relief for home-office expenses

As many office-based employees approach the new 2021/22 tax year while still working from home, the government has extended the temporary income tax and Class 1 National Insurance exemption for expenses reimbursed by the employer to cover the cost of home-office equipment.

Office equipment

As part of the measures introduced last year to support individuals during the pandemic, the government announced measures in cases where employees who bought office and computer equipment necessary for them to work from home in line with government guidelines were reimbursed for that expenditure by their employer. In these cases, the employer would then not face a benefit-in-kind charge subject to income tax and Class 1 National Insurance. This covered the 2020/21 tax year and so was due to end on 5 April 2021.

However, the government has now announced that this measure will be extended through the 2021/22 financial year, and so continues to apply up until 5 April 2022.

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David Conway

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Office equipment

However, the government has now announced that this measure will be extended through the 2021/22 financial year, and so continues to apply up until 5 April 2022.

Use of home

If you’re working from home and haven’t had your expenses reimbursed (including an appropriate apportionment of utility bills such as heating and lighting where appropriate), you can look to make a claim for income tax and National Insurance reimbursement on expenses incurred or apply for a standard £6 per week while you work from home. Click here to visit the GOV.UK website for more information and to check if you’re eligible. You can make a claim on HMRC’s website, or at the end of the year on your tax return.

For 2020/21, the government announced that employees could apply the £6 per week claim for the entire tax year if they were required to work from home at some point during the year (which in practice would apply to most office-based employees). There have been no announcements yet regarding an extension to this relaxation for 2021/22.

What should you do?

If you are reimbursed for qualifying home-office expenditure by your employer, the good news is that no action is required in order to qualify for tax and National Insurance relief, as it should not appear on your Form P11Ds for 2020/21, reporting benefits and expenses. The same should also apply for 2021/22.

You should consider whether you qualify for a standard £6 per week for the whole of 2020/21 and make a claim where appropriate.

If you face extended periods of working from home in 2021/22 and no new measures are announced, you should keep records of this time and consider making a claim in due course.

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For more information on the above, or for tax advice tailored to you, please fill out the form below and one of our experts will be in touch to discuss your requirements.