Claim Tax Back: Working From Home Tax Relief UK

Oct 30, 2025 by Admin 48 views

Hey guys! Working from home has become the new normal for many of us in the UK. But did you know you might be able to claim tax relief for some of your expenses? That's right! The UK government offers a way to ease the financial burden of setting up a home office. Let's dive into how you can claim tax back for working from home.

What is Working From Home Tax Relief?

Working from home tax relief, also known as 'working from home allowance' or 'home working allowance,' is a scheme that allows employees to claim tax relief on expenses incurred as a direct result of working from home. This isn't just about claiming for your fancy new ergonomic chair, though that would be nice! It covers some of the extra costs you might face when your house becomes your office.

Eligibility for Tax Relief

Before we get too excited, let's see if you're eligible. You can claim tax relief if:

You had to work from home, even if it was just for one day. This applies if your employer didn't provide office space or required you to work from home.
You incurred extra costs because you were working from home. This could include things like heating, electricity, or internet usage.

However, you can't claim tax relief if:

You chose to work from home, and your employer provided you with an office space.
Your employer already reimbursed all your expenses.

Eligible Expenses You Can Claim

So, what exactly can you claim? The types of expenses that qualify for tax relief generally fall into a few key categories, primarily focusing on the increased costs you incur by using your home as your workplace. These include:

Increased utility bills: This is perhaps the most common claim. When you're home all day, you're using more electricity for lighting, heating, and powering your computer. You're also likely using more water. The tax relief helps offset these increased costs.
Business phone calls: If you're using your personal phone for work calls and not being reimbursed by your employer, you can claim for the cost of these calls. It's a good idea to keep a record of these calls to support your claim.
Internet usage: With more and more meetings and work tasks moving online, your internet usage is likely to have increased. You can claim tax relief on the portion of your internet bill that is directly related to your work.
Stationery and office supplies: While these might seem minor, the costs of pens, paper, and other office supplies can add up over time. If you're buying these items yourself and not being reimbursed, you can include them in your claim.

It's essential to keep in mind that you can only claim for the extra costs you've incurred. For example, you can't claim for the rent or mortgage on your home, as you would be paying that regardless of whether you were working from home. Also, if your employer has already reimbursed you for any of these expenses, you can't claim tax relief on them.

To make the claim process smoother, it's a good idea to keep detailed records of all your expenses. This could include utility bills, phone bills, internet bills, and receipts for office supplies. The more evidence you have to support your claim, the better your chances of a successful application. By understanding what expenses are eligible, you can ensure you're not missing out on potential tax savings.

How Much Can You Actually Claim?

Okay, let's talk numbers. How much can you actually claim back? There are two ways to calculate this:

The Flat Rate Method: HMRC (Her Majesty's Revenue and Customs) allows you to claim a flat rate of £6 per week (or £312 per year) without needing to provide detailed evidence of your extra costs. This is the easiest option, but it might not be the most beneficial if your actual costs are higher.
The Actual Costs Method: If your actual costs are more than £6 per week, you can claim the actual amount. However, you'll need to keep detailed records and be able to prove these costs. This method requires a bit more effort, but it could result in a larger tax refund.

Understanding the Flat Rate Method

The flat rate method is the simplest way to claim tax relief for working from home. HMRC allows you to claim a standard amount of £6 per week, which works out to £312 per year, without needing to provide detailed evidence of your expenses. This is a great option if you don't want to spend time collecting and organizing receipts and bills. However, it's important to note that this is a fixed amount, regardless of whether your actual expenses are higher or lower.

To use the flat rate method, you simply include the weekly or annual amount in your tax relief claim. You don't need to provide any further documentation unless HMRC specifically requests it. This makes it a hassle-free way to get some tax relief without the need for extensive record-keeping. While the amount may not be substantial, it can still add up over the year and provide some financial relief.

Calculating Actual Costs for Tax Relief

If you believe your actual costs of working from home exceed the £6 per week flat rate, you can claim the actual amount. However, this requires you to calculate and document your expenses carefully. This method involves determining the portion of your household bills that are directly related to your work. Here’s how to go about it:

Identify eligible expenses: Start by listing all the expenses you believe are eligible for tax relief. This includes utilities (electricity, gas, water), internet, phone calls, and stationery.
Calculate the work-related portion: For each expense, determine what portion is directly related to your work. For example, if you use one room in your house exclusively as an office, you might allocate a percentage of your utility bills based on the square footage of that room compared to the total square footage of your home.
Keep detailed records: Maintain detailed records of all your expenses, including bills, receipts, and calculations. This documentation is essential to support your claim and may be requested by HMRC.
Be prepared to justify your calculations: HMRC may ask you to justify how you arrived at your figures, so it's important to be thorough and accurate in your calculations. If you're unsure, it may be helpful to seek advice from a tax professional.

By calculating your actual costs, you may be able to claim a larger amount of tax relief than the flat rate. However, this method requires more effort and attention to detail. Make sure you have all the necessary documentation and are prepared to justify your claim to HMRC.

How to Claim Tax Relief for Working From Home

Ready to claim? Here's how you can do it:

Online via HMRC: The easiest way is to use the online service on the GOV.UK website. You'll need a Government Gateway user ID and password. If you don't have one, you can create one.
By Post: You can also claim by filling out a P87 form and sending it to HMRC. You can download the form from the GOV.UK website.

Step-by-Step Guide to Claiming Online

Claiming tax relief online through the HMRC portal is a straightforward process. Here's a detailed step-by-step guide to help you through it:

Access the HMRC website: Go to the GOV.UK website and navigate to the section for claiming tax relief on employment expenses.
Sign in to your Government Gateway account: You'll need a Government Gateway user ID and password to access the online service. If you don't have one, you can create one by following the on-screen instructions. Make sure you have your National Insurance number and other personal details ready.
Navigate to the P87 form: Once you're logged in, look for the option to claim tax relief for expenses. You'll likely need to fill out a P87 form, which is the standard form for claiming employment expenses.
Fill out the form: Provide all the required information accurately. This includes your personal details, employment information, and details of your expenses. If you're claiming the flat rate, simply enter the weekly or annual amount. If you're claiming actual costs, you'll need to provide a breakdown of your expenses and be prepared to upload supporting documents.
Review your claim: Before submitting, carefully review all the information you've entered to ensure it's accurate and complete. Any errors or omissions could delay the processing of your claim.
Submit your claim: Once you're satisfied with your application, submit it online. You'll receive a confirmation message acknowledging receipt of your claim.
Wait for processing: HMRC will process your claim and notify you of the outcome. This may take several weeks or even months, depending on the volume of claims they're processing.

By following these steps, you can easily submit your claim for tax relief online and potentially receive a refund for your work-from-home expenses.

Claiming by Post: A Traditional Approach

If you prefer a more traditional method, you can claim tax relief for working from home by post. This involves downloading and completing a P87 form and sending it to HMRC. Here's how to do it:

Download the P87 form: Visit the GOV.UK website and search for the P87 form. Download the form and print it out.
Complete the form: Fill out all the required sections of the form accurately. This includes your personal details, employment information, and details of your expenses. Make sure to use black ink and write clearly.
Attach supporting documents: If you're claiming actual costs, include copies of your supporting documents, such as bills and receipts. Make sure the copies are clear and legible.
Review the form: Before sending the form, carefully review all the information to ensure it's accurate and complete. Any errors or omissions could delay the processing of your claim.
Send the form: Send the completed form and supporting documents to the address provided on the form. It's a good idea to send it via registered mail so you can track its delivery.
Wait for processing: HMRC will process your claim and notify you of the outcome. This may take several weeks or even months, depending on the volume of claims they're processing.

While claiming by post may take longer than claiming online, it's still a viable option for those who prefer a more traditional approach. Just make sure to fill out the form accurately and include all the necessary documentation to support your claim.

Key Things to Remember When Claiming

Before you rush off to claim tax relief, here are a few essential things to keep in mind:

Keep Records: Whether you're claiming the flat rate or actual costs, keep detailed records of your expenses. This will make the process much smoother and help if HMRC asks for more information.
Be Accurate: Make sure the information you provide is accurate. Incorrect information could delay your claim or even lead to penalties.
Claim Within the Deadline: You can usually claim tax relief for the previous four tax years. Be aware of the deadlines to ensure you don't miss out.
Seek Advice if Needed: If you're unsure about anything, don't hesitate to seek advice from a tax professional or HMRC. They can provide guidance and help you navigate the process.

Maximizing Your Tax Relief Claim: Expert Tips

To make the most of your tax relief claim for working from home, consider these expert tips:

Assess Your Actual Costs: Take the time to accurately assess your actual costs. While the flat rate is convenient, you might be missing out on a larger refund if your expenses are higher.
Document Everything: Keep meticulous records of all your expenses, including bills, receipts, and calculations. The more documentation you have, the stronger your claim will be.
Be Specific: When calculating your expenses, be as specific as possible. Allocate a fair portion of your utility bills to your work-related activities based on the amount of time you spend working from home.
Seek Professional Advice: If you're unsure about any aspect of your claim, don't hesitate to seek advice from a tax professional. They can provide personalized guidance and ensure you're claiming everything you're entitled to.

By following these tips, you can increase your chances of a successful tax relief claim and potentially receive a larger refund for your work-from-home expenses.

Don't Miss Out!

So, there you have it! Claiming tax relief for working from home is a great way to ease the financial strain of setting up a home office. Don't miss out on the opportunity to claim back some of your expenses. Get started today and put that extra cash to good use! Remember to keep accurate records and claim within the deadline. Good luck!