Working from Home - Flat rate allowance
Overview 🏡
Employers can pay employees up to £6 per week (£26 per month) tax-free if there is an agreement that the employee regularly performs duties from home.
This allowance covers additional day-to-day household costs such as heating and lighting. Employees do not need to keep records of actual expenses.
🔗 HMRC: Claim tax relief for your job expenses – Working from home
✅ How Employers Can Pay It
The simplest method is to add the allowance to employees’ monthly wages. Our payroll team can assist with setting this up.
Employee Claims if Employer Does Not Pay
If the business does not pay the allowance, employees can still claim tax relief directly from HMRC on £6 per week, provided there is a home-working arrangement in place.
To make a claim, employees will need to:
- Visit HMRC’s portal and complete the eligibility questions.
- Answer questions about other work-related expenses.
- Create a Government Gateway ID (if they do not already have one).
- State the date they started working from home.
💡 Notes for Directors
Directors can also claim this allowance. However, if they normally complete a Self Assessment tax return, they cannot use HMRC’s online portal. Instead, the claim must be included on their Self Assessment return (we will include this if we prepare your return).
