Seen one of those online ads promising a quick tax refund for working from home? You’re not alone—and HMRC has started to take notice too.
In a recent warning posted on X (formerly Twitter), HMRC urged taxpayers to check their eligibility before claiming relief for homeworking costs. So, what’s actually allowed—and who can claim?
Here’s everything small business owners and employees need to know.
What’s the Rule on Working from Home Expenses?
If you’re an employee, you can claim tax relief on expenses you’ve had to pay wholly, exclusively, and necessarily for your job. That includes extra household costs due to working from home—but only if certain conditions are met.
According to HMRC, the test is passed when:
- The duties you perform at home are core parts of your job.
- These duties require specific facilities to be carried out.
- Such facilities are not available at your employer’s premises, or your job requires you to live too far away to travel in daily.
- You have no option to work from your employer’s premises, either before or after signing your contract.
In other words, the relief is for people who have to work from home—not those who choose to.
What If You Choose to Work from Home?
Here’s where many people go wrong.
If your employer offers flexible working, and you simply prefer to work from home on some days—even if you’re doing exactly the same work—you can’t claim tax relief for household costs on those days.
The key factor is whether you’re contractually required to work from home. If it’s written into your employment contract that home working is mandatory, then you’re on firmer ground when it comes to making a claim.
How Much Can You Claim?
If you qualify, you’ve got two options:
- Claim a flat rate of £6 per week for the weeks you work from home at least part of the time.
- Claim the actual extra household costs, such as heating, electricity, and cleaning—if they’re higher than £6 per week.
Option 1 is the simpler route and suits most people. But if your costs are noticeably higher, claiming the actual amount could save you more. Just make sure you have the paperwork to back it up.
How Do You Make a Claim?
You’ve got a few ways to claim, depending on your situation:
- Online via HMRC – If your total employment expenses are £2,500 or less.
- Through your Self Assessment tax return – If you already file one.
- By post using form P87 – For those not using the online service.
You’ll need to provide evidence that you’re required to work from home—for example, a copy of your employment contract. And if you’re claiming actual costs, keep those bills handy to support your claim.
Not Sure If You Qualify?
With so many rules and exceptions, it’s easy to get caught out. If you’re unsure whether you’re eligible to claim working-from-home expenses—or whether it’s worth claiming the flat rate or actual costs—we can help you make the right call.
Get in touch with Jon or the team today to find out how the rules apply to your situation and make sure you’re not missing out on legitimate savings.
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Any questions?
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