Working at home deductions

Sep 27, 2022

There are now almost 10 million people who work from home and can benefit from the tax-free allowance of £6 per week (£26 per month) which their employer may choose to pay.

Employers can reimburse larger amounts to home-based employees if the employees can prove that their increased variable costs from working at home, including heating, exceed £6 per week.

If you do not receive a homeworking allowance and you are required to work at home by your employer, you can claim a tax deduction of £6 per week from HMRC. However you must have a homeworking agreement in place with your employer which sets out the conditions under which you work from home.

Where your extra costs of working at home are higher than £6 per week you can claim a deduction from HMRC for the actual additional costs. With electricity and gas bills climbing, the cost of heating a room to work in may well exceed £6 per week. HMRC may ask to see proof of those costs so keep the bills as evidence.

You can claim the homeworking deduction on your self-assessment tax return or by using the online form P87. Where a similar claim has been made in an earlier year you can renew that claim by phoning HMRC.

We can help you calculate the additional costs of working at home.

Other Autumn Tax Briefing 2022 articles

Electronic sales suppression

Cost of travelling to work

Reporting UK property gains

Paying your income tax bill

Loans to employees

Beware of early RTI returns