If an employer has asked an employee to work from their own home, it can pay a tax-free allowance of £6 per week to compensate for any additional costs incurred.
These costs may include additional electricity, gas or water consumed while at home in working hours. If the employee is using their own telephone, the employer can also reimburse for the cost of business calls made.
Where the employer does not pay a working from home allowance and the employee does not have a choice about working from home for some of the working time, the employee can claim the working from home deduction of £6 per week from HMRC (see: www.gov.uk/tax-relief-for-employees/working-at-home).
Anyone who made a claim for the working from home allowance for the tax year 2020-21, if they are still working from home, can make another claim now for the tax year 2021-22.
The working from home deduction is worth £1.20 per week in cash terms for basic rate taxpayers and £2.40 per week for higher rate taxpayers.