Working at Home Allowance

Where you are required to work at home, your employer can pay you a tax-free allowance of £6 per week (or £26 per month). This allowance is to cover the additional costs incurred by using your home as a workplace, such as heat, light, metered water, insurance and broadband costs.

If your employer does not pay this allowance, but you are required to work at home for at least some of your working time, you can claim the same amounts as a tax deduction from HMRC.

You do not need to provide evidence of the additional home expenses incurred if you claim up to £6 per week. Where the additional costs exceed this value, you can claim for the actual expenses incurred, but you will be required to have proof in the form of receipts, bills or contracts.

A claim for home working expenses for 2022/23 can be submitted online, or as part of your self-assessment tax return, or using form P87. Claims for earlier years may be submitted on tax returns or form P87 and they must reach HMRC within four years of the end of the tax year to which they apply.

HMRC is tightening its rules on expense claims. It announced on 29 November 2022 that more boxes of the P87 must be completed and that, from 21 December 2022, any P87 forms that do not include the required information will be rejected.

The information in this blog provides only an overview of HMRC guidance and legislation in force at the date of publication and no action should be taken without consulting the detailed HMRC guidance and legislation or seeking professional advice.  Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this blog can be accepted by the firm.

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