Working from home allowance in 2023 – what you need to know
Posted on 28th October 2022
HMRC changed the tax relief rules for working from home for the 2022/23 tax year.
Working from home during the pandemic
To help cover the costs of working from home during the pandemic you could receive a tax free allowance of £6 a week or £312 for the year. You could claim for a whole year, even if you only worked from home for part of the year. The allowance was available if your employer had told you to work from home, your household costs increased due to home working and if your employer didn’t pay you expenses to cover these costs.
For example, a study by Nottingham Trent University showed that home workers could pay up to £45 more a month in energy costs. Working from home tax relief was claimed by more than 3million people for the 2020/21 tax year.
New home working rules for 2022/23
From 6 April 2022 the rules changed so you must meet one of these conditions to claim tax relief for you working from home expenses:
Your employer doesn’t have a place for you to work on site.
You live so far away from your employer’s premises that it would be unreasonable for you to commute every day, due to the nature of your job.
You are required to work from home due to government restrictions.
As many people have now returned to their workplace or are hybrid working HMRC says the changes to tax relief on expenses for those working from home mean the cost will go back to pre-pandemic levels.
How working from home tax relief has changed
You might have successfully claimed tax relief on your flat-rate allowance or actual expenses if you worked from home for some or all of the time in 2020/21 or 2021/22.
Now you can only claim tax relief if you have to work from home and your employer isn’t paying any expenses directly to you to cover the extra costs.
So, if you are self-employed or your contract is flexible about working on site or from home, you won’t be able to claim tax relief for your working from home expenses for the 2022/23 tax year.
You can backdate a claim
You can backdate a claim for up to four years. If you were eligible in the 2020/21 or 2021/22 tax years and didn’t make a claim you can still claim even if you don’t now qualify. You will have to make your claim before 5 April 2025 and 5 April 2026 respectively. If approved your claim will be paid as a lump sum.
The amount you can claim will depend on whether you’re a basic (20%), higher (40%) or additional (45%) rate taxpayer.
|
Tax rate |
Claim on the weekly flat rate of £6 |
|
Basic (20%) |
£1.20 per week or £62.40 per tax year |
|
Higher (40%) |
£2.40 per week or £124.80 per tax year |
|
Additional (45%) |
£2.70 per week or £140.40 per tax year |
Claiming extra costs
You can claim extra costs for things that help you do your job, above the £6 a week flat rate allowance. This could include gas and electricity, metered water, business phone calls and internet access, and possibly equipment you’ve bought like computers, desks and chairs. You will need your receipts, bills or contracts to claim.
How working from home tax relief is paid
Once your application has been approved, your tax code will be adjusted, so you’ll receive this tax relief directly through your salary.
How to claim
You can go to the government website where you answer a series of questions from HMRC to make your claim. You’ll also need evidence like receipts and bills if you want to claim exact additional costs.
If you don’t already have one you will need to create a Government Gateway ID. To do this you will need your National Insurance (NI) number and some identification such as your P60 or a current UK passport.
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