The next step

Claiming the working from home expense

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On homeworking

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HMRC’s online claim system

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Unexpected tax break for homeworkers

Working from home. In March 2020 the government indicated that because of coronavirus HMRC might apply the rules regarding homeworking expenses for employees less strictly. However, the only change until recently related to employer-provided equipment and was a full statutory exemption and not a change in HMRC’s practice ( yr.20, iss.20, pg.8 , see The next step ). In mid-October, after pressure from professional tax bodies, HMRC confirmed it has changed its policy.

Relaxed conditions. The new policy relates to the tax deductions (£6 per week) that can be claimed by employees (and directors) who because of coronavirus have been forced to work from home because of self-isolation requirements or to allow social distancing at their workplace. Usually, HMRC’s practice is to only allow the full £6 deduction for employees who are obliged by their contract to work from home full time. Tip. You can now claim £6 per week even if you work at home (because of coronavirus) for just one day per week. This more generous application of the rules applies for the whole of 2020/21 and the period at the end of 2019/20 (when the deduction was only £4 per week) from when the government advised people to work at home if they could. That was a week or two before the full lockdown took effect.

Confusing advice. You might have seen articles in the press about the change suggesting you can claim a full year’s allowance even if you only worked from home for part of this tax year. HMRC’s latest guidance, while not entirely clear, doesn’t support this. It indicates that you can only claim the deduction for each week that you worked at home all or part of the time. HMRC has created a webpage to help you claim the tax deduction, but it merely links you to its existing rather substandard employee expenses service (see The next step ). Therefore we recommend reading our short guide before making your claim (see The next step ).

For the previous article, a link to HMRC’s online claim system and our guide to claiming the expense, visit https://www. tips-and-advice.co.uk , Download Zone, year 21, issue 03.