In a post on X, HMRC recently warned taxpayers ‘not to get caught out by ads promising quick refunds for working from home’, urging taxpayers to check that they were eligible before making a claim.

So what relief is available to employees who sometimes or always work from home?

The rule

A deduction can be claimed for employment expenses to the extent that they are incurred wholly, exclusively and necessarily in the performance of the duties of the employment. In relation to expenses incurred when working from home, HMRC accept that this test is met in the following circumstances:

· The duties that the employee performs at home are substantive duties of the employment. These are duties that an employee has to carry out that represent all or part of the central duties of the employment.

· The duties cannot be performed without the use of tappropriate facilities.

· No such appropriate facilitiesare available to the employee at the employer’s premises or the nature of the job requires the employee to live so far from the employer’s premises that it is unreasonable to expect the employee to travel to the employer’s premises daily.

· At no time before or after the employment contract is drawn up is the employee able to choose between working at the employer’s premises or elsewhere.

Personal choice

The test is not met where an employee works from home through personal choice rather than because they are required to work from home. For example, where an employer operates a flexible working policy whereby employees must work from the employer’s premises on certain days and can choose whether to work at the employer’s premises or at home on the other days, the employee cannot claim tax relief for additional household costs on the days that they choose to work from home, even if they do the same work on these days that they would have done at the employer’s premises. However, where an employee is contractually obliged to work from home, they are able to claim a deduction for additional household expenses incurred as a result.

Making a claim

Where the conditions are met, the employee can claim a fixed deduction of £6 per week for the weeks when they work at home at least some of the time. Alternatively, they can claim the actual additional household costs, such as additional electricity, gas and cleaning costs, that they incur as a result of working from home. A claim based on actual expenses is only worthwhile where the amount claimed is more than £6 per week.

A claim can be made online (where the total claim in respect of employment expenses is not more than £2,500), in a Self Assessment return or by post on form P87. The employee must supply evidence to show that they are required to work from home, such as a copy of their employment contract. Where the claim is based on actual amounts, evidence, such as copies of bills, must be provided in support of the amount claimed.