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HMRC clarifies its approach on tax relief for home working

Navin Sharma, Assistant Manager, Employers Advisory Group
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Employees claiming tax relief of £6 per week for the additional household expenses incurred for having to work from home can now obtain relief for the full 2020/21 tax year. They can do this via the form P87 even if they have now returned to their office.

A recent change in HMRC’s web form has provided guidance saying that you can now apply for tax relief for the whole of this tax year, even if you do not know how much longer you will be working from home, and you go back to your workplace before 6 April 2021. HMRC confirmed that at the end of the tax year, the tax relief will stop and any further relief will need to be claimed in the new tax year.

There has been some confusion recently as employees have been unsure whether they could claim tax relief while their office was open but  subject to reduced numbers on site to maintain social distancing measures. The new web form has helped clarify this position. It will also mean that HMRC don’t need to police the dates at which staff return to the office full time.

We expect that HMRC will release further details on this subject soon including advice for those who claim relief via their self-assessment tax returns.

For more information on how employment tax consequences of working from home, read our insight.

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Caroline Harwood
Caroline Harwood
Partner, Head of Share Plans and Employment Tax