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A reminder about working from home allowance

10 February 2021

With the tax year end soon upon us, it is worth thinking about whether those workers who have been working at home since the beginning of April should qualify for the weekly working at home tax free allowance. As mentioned in our earlier update, this allowance is for homeworking employees to cover additional arising costs such as extra heating, light, etc., and employees do not need to keep records or invoices for this allowance.

If as an employer you wish to pay the £6 per week, this can be paid for all employees who have worked from home for at least some of the time since 6 April 2020 as a result of restrictions, lockdowns and the like. For a full year, the tax-free payment for each employee would be £312 (6 x 52 per weeks). If you do not pay this allowance to employees for a full year period, you can calculate it on a weekly basis at a rate of £6 per week.

Alternatively, you can suggest to your employees that they contact HMRC and complete a very simple online application to have their code numbers revised to include a tax allowance of £312. If employees proceed with this online application at an early date, from experience, it is dealt with very promptly by HMRC and should hit tax code revisions and therefore payrolls either in February or March this year.

If you wish to discuss this particular matter please do not hesitate to telephone Alan McCann in our tax department.

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