Have your staff been working at home due to the Covid-19 pandemic?

If so they are not alone. According to the Office of National Statistics, during the pandemic, over 46% of people did some sort of work at home in April 2020. If your employees are working from home this is classed as a workplace. Employees working from home may be entitled to tax relief on their earnings to cover any cost of additional expenses.

Working from home

In HMRC’s eyes, for an employee to be classed as working from home, they should be carrying out their duties there for a set amount of time, weekly. It doesn’t matter if they change the exact days around, so long as they’re still working their agreed hours, from home each week.

Informal working that hasn’t been agreed on doesn’t count, for example, taking work home to do outside of your core hours. For this reason, it’s better that something is agreed formally between employer and employee. Ideally, it will be written down as well.

As an employer, you can pay a tax-free allowance of up to £6 per week (£26 per month) to employees who you have asked to work from home.

The pandemic led to a few amendments to the rules. Suddenly employees were working from home because their offices were closed or they needed to self-isolate or shield themselves. Due to this sudden increase in numbers, HMRC simplified the rules on who could claim and made it easier to do so.

It is worth noting here that HMRC has confirmed in the past that the £6 per week/£26 per month is available in full, even if an employee splits their time between home and the office. Or even, as we saw, if they returned to the office only for the situation to change and the UK to enter into another lockdown.

Employees that are having to work from home due to the pandemic can continue to claim tax relief on costs that are not reimbursed by their employer.

If you are currently paying your employee’s the tax-free allowance for working from home then you should keep in mind that a new claim has to be made for the 2021/22 tax year.

It is widely understood that the rules will again change when the pandemic eases. It is likely that they will revert back fully to the previous position. The criteria here was significantly tighter so it is probably a good idea to so, if you haven't already, we'd suggest familiarising yourself with it.

EDIT: HMRC is reported to have received 800,000 claims so far. They will be accepting backdated claims for up to four years.

As always, we are on hand to help support your business, please get in touch. We are based in West Bridgford, Nottingham and we work with clients throughout the UK.