Employees who claimed home office tax relief during the pandemic could end up paying more tax this year

Employees who have been claiming “Home Office Relief” during the Covid-19 Lockdown should be urgently reviewing their tax codes to clarify whether HMRC have included the relief within their notice of coding.

Robert Salter, Client Tax Director at Blick Rothenberg, says that: “Employees should be reviewing their PAYE tax codes to clarify whether HMRC have included the home office relief within the notice of coding.”

“If this is the case, unless they are still eligible for the relief in 2022/23 – they should contact HMRC to get the notice of coding corrected. Otherwise, they will have additional tax to pay at the end of the tax year.

“The Government relaxed the rules regarding home office working and the associated eligibility for claiming home office relief for the 2020/21, 2021/22 and 2022/23 UK tax years. In effect, due to Covid, people can claim the £6 per week tax relief in full for each of these tax years, where they were simply required to work from home for a limited period in each of these tax years. For example, if your employer required you to work from home during specific lockdowns for a few weeks, you were entitled to claim tax relief of £312 for the year (52 weeks x £6 per week), unless your employer covered your home office costs.

“However, this was a temporary relaxation of the rules on the part of HMRC. As such, the home office relief is only available from 6th April 2022 onwards, if your employer specifically requires you to work from a home office – e.g., to stop the spread of Covid or because your job has been ‘relocated’ and is now contractually regarded 100% as a home office role.

“If, for example, your employer simply now allows staff to working flexibly – i.e., being in the office or working from home as it suits each individual, the home office relief ceases to be available for the 2022/23 tax year and no tax relief is available for the costs which one incurs from working from home in this situation.”

If you would like to discuss any of the above, please get in touch with Robert Salter using the details on this page.

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