The guidance for claiming tax relief for working from home has changed for expenses on or after 6 April 2022
During the pandemic tax relief was available to employees working from home due to government coronavirus guidelines, regardless how many days the employee did actually work at home. This temporary relief was in place for the whole of the 2020/21 and 2021/22 tax years. The relief was normally given by an adjustment to the individual’s PAYE tax code, or by employers making tax free payments to employees of up to £6 per week.
HM Revenue & Customs has confirmed the temporary relief ended on 5 April 2022. Where employees choose to work from home or employers allow homeworking those workers will no longer qualify for the relief. Homeworking tax relief is still available but there is now a need for the employee to have no choice but to work from home to qualify and the relief is only available for the weeks worked at home, not a blanket claim for the whole tax year.
Employees should review their PAYE tax codes to ensure that where they include an adjustment for the working from home allowance they are actually due the relief. It is our understanding many tax codes issued by HMRC for the current tax year continue to include the deduction. If the codes are not amended, further tax will be due and tax underpayments could continue into future tax years so this needs to be corrected as soon as possible.
Employers should review their practice of making tax free payments of up to £26 per month to ensure that the employee does still qualify under the revised stricter rules. These payments should cease immediately unless the employee has no choice but to work from home.