Working from home: Homeworking rates and allowances

What tax-free allowances are there for working from home? What allowances can be paid to homeworking employees?

This is a freeview 'At a glance' guide to to homeworking rates and allowances.

At a glance

Fixed rates for homeworking are agreed by HMRC: these amounts can be paid by employers to their homeworking employees to reimburse them for the additional costs of things such as light and heat used when homeworking. 

Alternatively, employees may be able to claim actual costs of homeworking if wholly, exclusively and necessarily incurred or in job-related accommodation. See Working from home: employer/employee

These are the maximum amounts that may be paid by an employer, without requiring a receipt, or evidence of expenditure by the employee.

A claim form for use by employees and employers can be found here: Working from home: claim form

If higher amounts are paid these need to be evidenced by receipts, and the employer must disclose amounts reimbursed on form P11D, unless they are approved under the Exemption for paid and reimbursed expenses.

COVID-19

The COVID-19 Homeworking exemption to Income Tax and National Insurance Contributions (NICs) where the employer reimbursed home office equipment expenditure was extended until 5 April 2022 and ceased to apply thereafter.

HMRC provided guidance for employees who are homeworking due to the coronavirus crisis, see COVID-19: Working from home.