New income tax relief eligibility rules for those working from home

The pandemic forced millions more people to work from home, and as a result, the Government introduced an income tax allowance of £6 a week.

The rules were also temporarily changed so employees didn’t need to prove that they worked from home regularly. Instead, it meant they could claim up to £140 per year even if only working from home for one day.

As many workers are now back in the workplace, HMRC has updated its guidance for the 2022/23 tax year.

Those employees, who are still eligible, can claim from the current tax year 2022/23 onwards for tax relief, but they can’t claim if they choose to work from home.

What has changed?

The eligibility criteria are different depending on which tax year you are claiming for.

For the 2020/21 and 2021/22 tax years, employees will need to meet the following criteria to be eligible for the working-from-home tax relief:

·        Your employer told you to work from home.

·        Your household costs increased because of working from home.

·        Your employer did not pay your expenses to cover the extra costs associated with working from home.

Claims can be backdated for the working-from-home allowance, so there is still time to claim for both the 2020/21 tax year and the 2021/22 tax year.

However, for the 2022/23 tax year, employees can’t claim tax relief if they choose to work from home.

This includes if their contract lets them work from home some or all of the time, if they work from home because of COVID-19 or if their employer has an office, but they cannot go there sometimes because it’s full.

But some people will still be able to claim with HMRC giving examples of if their job requires them to live far away from the office. Or the employer doesn’t have an office.

Need advice on income tax relief? Contact us today.

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