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During the 2020/21 and 2021/22 tax years many people worked from home. Anyone instructed to do so by their employer could claim tax relief. Even if they worked at home for just one day during each tax period. Now, there are new working from home rules. It’s time for an update. 

 

Tax allowance

Under rules introduced due to coronavirus, workers could claim £312. This was permissible for each tax year. The sum covered energy and business phone calls, for example. Meanwhile, if the employer reimbursed the cost of office equipment, this was not subject to tax and National Insurance. Forgot to claim? Don’t miss out. You can still claim the Working from Home Tax Allowance for 2020/21 and 2021/22.  

 

Working from home rules 

In general, we declare the pandemic is over. We’re resuming ‘normal life’. Therefore, the usual tax rules reapply. Yet changes in work practices are longer lasting. So, how do the revised working from home rules impact? 

 

Choice  

So, the crux of the matter is choice. Does the employee choose to work from home? Or does the employer require it? Let’s say the employer introduces a voluntary homeworking scheme. The employee decides to work three days a week at home and two days at the company’s premises. In this instance, the employee cannot claim tax relief.  

 

No option 

On the other hand, what if the employer downsized? Desk sharing becomes necessary due to space constraints. There’s not enough room for all employees to come to the workplace every day. Or perhaps a local branch closed. Consequently, the daily travel time to alternative premises becomes excessive. Here, the employee can make a claim. Either for the full amount or the weekly portion. Work from home three days a week and claim £187. This equates to three fifths of the allowance. 

 

Office equipment 

Importantly, there are rule changes regarding equipment. Say the employer provides a desk or computer to enable an employee to work at home. There’s no taxable benefit on the equipment supplied. But what if the employee purchases the equipment? Then the employer refunds the cost. Now this amount is treated as a taxable expense. As such it is subject to tax and National Insurance. 

 

Travel expenses 

Yet another key area is travel to work. There are revised working from home rules regarding commuting. Typically, travel on the set days an employee works at the premises is ordinary commuting. Sometimes, the employee may need to attend the workplace on one of their agreed homeworking days. If so, treat travel as a non-taxable expense.   

 

Keep records 

The working from home rules changed on 6 April 2022. Many people will be affected. Therefore, we recommend that both employer and employee keep records. As required, these will help to support taxable expenses claims.