Working from home: are the tax breaks being axed in April?
As a result of the coronavirus pandemic, the government relaxed the rules regarding claiming relief for working from home back in 2020. This relaxation ends in April 2022, so what will the position be after that?
Since 6 April 2020, employees have been able to claim a flat rate of £6 per week income tax relief if they must work from home. The relief is worth between £62 and £125 per year which is a contribution to the additional costs of working from home, such as increased utility bills. It can be claimed in full for both the 2020/21 and 2021/22 tax years if an employee has been required to work from home at some point during each tax year. This means that job expenses of £312 per tax year can be claimed even if an individual only spent one day working from home.
As the cost to the Treasury has spiralled to £500 million, the government is reviewing the relief which is set to end in April 2022. Some media articles have incorrectly described the relief as a tax loophole when in fact HMRC urged taxpayers to claim as the measure was specifically introduced to help taxpayers during the pandemic.
Now that the government is no longer advising individuals to work from home, we expect that the relief will revert to pre-coronavirus rules whereby claims could only be made for the actual number of weeks spent working from home. Anyone who needs to make a claim under the more generous rules for 2020/21 or 2021/22 can do so here.
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