Tax breaks working from home
Employees who are working from home may be able to claim tax relief for any additional costs due to home working. No tax relief will be due if employers reimburse employees for the additional household expenses incurred.
The tax relief covers expenses such as business telephone calls or heating and lighting costs. Expenses that are for both for private and business use (such as broadband) cannot be claimed. Employees may also be able to claim tax relief on equipment purchased. For example, a laptop, chair or mobile phone.
Since 6 April 2020, employers can pay up to £6 per week (or £26 a month for employees paid monthly) to cover an employee's additional costs if they have to work from home. Employees do not need to keep any specific records if they receive this fixed amount.
If the expenses or allowances are not paid by the employer, then the employee can claim tax relief directly from HMRC. Employees will qualify for tax relief based on their highest tax rate. For example, if they pay the 20% basic rate of tax and claim tax relief on £6 a week they would receive £1.20 per week in tax relief (20% of £6).
Employees can claim more than HMRC's fixed amounts but may need to provide evidence to HMRC of the amount claimed.
Note, that if an employee is working at home voluntarily, they cannot claim tax relief.
However, these tax reliefs are available to anyone who has been asked to work from home due to the COVID-19 outbreak.