is a Home Office tax deductible?

is a Home Office tax deductible

Claiming tax relief on working from home

As the coronavirus forces more people to work from home than ever before, the UK HMRC has seen a dramatic increase in the number of people seeking to get some money back by claiming tax deductions for their new home offices.

These new homeworkers who often have not been given a choice in the matter are finding they are the ones having to shoulder the financial responsibility of setting up their houses so they can work from home

Through HMRC, employees can seek working from home tax relief to help cover some of the additional costs that the change brings. Filling in a ‘P87’ form also enables you to claim back some of the cash spent in order to allow you to fulfil your work duties. 

The amount you can claim is quite low, but it can be a useful addition to your bank balance if you have had to pay out to work from home.

What are the tax deductible items I can claim for?

When claiming for working from home tax relief, you are able to include the costs associated with items that are “wholly, exclusively and necessary” to do your job successfully from home. This can include your desk, office chair, stationery, printer ink, paper, and more.

You cannot claim for an increase in your use of electricity or other costs associated with running a house, because these are not specific to being able to work from home.

How much can I claim in tax relief for working from home?

There are two ways you can claim to work from home. The first way is to ask your employer for a tax-free allowance can be paid directly to you. This will be £6 per week at base level, and more is possible, but this requires special arrangements with HMRC.

Whilst this is a good option normally, with COVID-19, employers are struggling to cope with the paperwork and the additional cost weekly that this £6 incurs.

Your second option is to make a working from home tax relief claim through the HMRC. This means you can have deducted from your taxable gross income, any additional costs you incur that are necessary to allow you to work from home, such as for example, buying equipment and furniture for your home office

If you are on the standard UK 20% tax rate, you can claim the equivalent of £1.20 per week in tax relief. This equates to about £62 per year. If you are on the higher UK income tax rate of 40%, this doubles up to £2.40 per week or around £124 per year.

If your claim is going to be higher than £6 per week (20%/40% of £6 equates to £1.20/£2.40 mentioned above), you can claim more but it will take longer to make your claim and you will have to provide detailed evidence to support your claim.

How do I apply for a home office tax deduction?

In general, anyone who completes a personal income tax self-assessment form each year should apply for this tax deduction. To do so you have to complete a UK P87 form.

You can submit your claim by post or online. If you want to complete the form online, you must first have access to, or set up a UK Government Gateway account.

When you complete the form, you will be asked to enter your job title, company name, pay stub, or your PAYE reference number (which you can find on your annual P60 tax return). If you complete the postal form, you must also provide your National Insurance number (NINO).

The section you need to complete on the form is the “Use my home as an office” section. If you are not eligible for tax deductions for other costs, such as uniforms, leave those sections blank.

You must complete two boxes on the online form.

Amount paid by you: If you incur a cost increase as a result of working from home, enter the total amount equal to £6 per week during the work at home period. According to HMRC, you don’t need to submit a receipt for this amount.

Amount paid by employer: Enter £0 if you have not received a £6 per week tax-free payment from your employer to cover the cost of working from home.

If you file a tax relief claim using the printed P87 form, you must add expenses incurred while working from home to the “Other Expenses” section of the form.

It is important to note that you can only retroactively claim for your Home Office working costs. This means, it will be easier to make your claim for your period working from home, once you know you are back in the office and working normally, before requesting tax relief.

If you are going to work permanently from home as a result of COVID-19 it is worth speaking to your employer and possibly taking advice on this.

Your claim itself is unlikely to be refunded during the same tax year, and instead, your tax code will be adjusted for the following tax period to compensate for the expenses you have incurred.

Normally you would be contacted by HMRC within a couple of weeks of making your claim, but these are not normal times and HMRC may take a while to process your tax claim.