1.8 million taxpayers claimed working from home tax relief in 2021-22

interactive investor Freedom of Information request reveals action taken by UK taxpayers, and it's not too late to put in a claim worth up to £250.

• “Those who haven’t claimed for the two previous tax years can get up £250 in tax relief, a sum not to be sniffed at amid the rising cost of living”, says Myron Jobson

Almost 1.8 million UK taxpayers successfully claimed online for tax relief for additional costs of working from home in the 2021-22 tax year. That’s according to official figures from HMRC exclusively obtained by interactive investor, the UK’s second-largest direct to consumer investment platform, using a Freedom of Information request.

In recognition of the home-working requirements imposed by the pandemic, the government made temporary changes to home-working relief in the 2020-21 and 2021-22 tax years, which meant that anyone told by their employer to work from home during the pandemic could make a claim to offset the extra household costs, such as heating and electricity.

HMRC are still accepting claims for the full year's expenses for the 2020-21 and 2021-22 tax years for employees who are eligible. Taxpayers have until 5 April 2025 to make claims for the 2020-21 tax year and until 5 April 2026 to make claims for 2021-22.

Figures from HMRC obtained via a Freedom of Information (FOI) request by interactive investor revealed 1,777,296 workers successfully claimed the relief, worth up to £125 per year, using its online microservice* in the 2021-22 tax year when millions of employees found themselves working at home because of the pandemic. This figure does not include those who claimed using other methods such as a P87 form.

Workers can claim the full year’s entitlement if they were told to work from home by their employer, even if it has been for one day during the 2020-21 and 2021-22 tax years.

In the 2021-22 tax year, the percentage of the estimated 32 million people in employment working from home peaked at 38%, or just over 12 million, in April. This figure includes people on furlough and self-employed individuals, totalling 3.5 million and 4.1 million at that time, respectively, as well as employees and other workers who were ineligible for the relief. 

Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “The once-novel idea of working from home became the norm for millions of people during the pandemic, with the government instructing workers to stay away from the office if possible to contain the spread of Covid.

“Almost 1.8 million workers took advantage of the tax relief in the 2021-22 tax year – which is likely to be a fraction of the number of workers eligible for the relief.

“It is not too late to claim for previous tax years. If your employer has asked you to work from home at any point since 2020, you could be eligible for between £62 and £125 in tax relief per tax year. That means those who haven’t claimed for the two previous tax years can get up £250 in tax relief, a sum not to be sniffed at amid the rising cost of living.

“Once the application is approved, the relief is paid through the worker’s salary through a change in the worker’s tax code.”

Making a claim for the current tax year

Myron Jobson says: “While the pandemic is in the rear-view mirror (hopefully), working from home remains prevalent among workers. A recent study of working patterns by the Office for National Statistics (ONS) found more than a third of working adults in Great Britain spent at least part of their time working from home in spring.

“Some workers will be able to make a claim for the current tax year, but many won’t be eligible because there is no longer an obligation to work from home.

“If you have been asked by your employer to work from home, even just for one day, you can still claim for the whole tax year. If you work from home by choice, you won’t be able to make a claim.

“Workers who have already claimed the relief for the previous tax year should check their tax codes to see if it still factors in the relief. If so, they should contact HMRC to get it corrected or face paying a bumper tax bill at the end of the tax year – unless they are still eligible for the relief.”

How it works

Since April 2020, the maximum amount employers have been able to pay tax-free without employees having to provide evidence of an increased bill was set at £6 a week. 

Employees who have not received the working-from-home expenses payment direct from their employer can apply to receive the tax relief from HMRC.

How much eligible taxpayers can get depends on the rate of income tax they pay.

Basic rate taxpayer: if an employed worker pays the 20% basic rate of tax and claims tax relief on £6 a week, they will receive £1.20 a week in tax relief (20% of £6 a week) towards the cost of their household bills. 

Higher-rate taxpayers: if an employed worker pays the higher rate of 40% tax, they will receive £2.40 a week (40% of £6 a week).

Over the course of the year, this means eligible taxpayers can reduce the tax they pay by £62.40 or £124.80 respectively.

Notes to Editors

* HMRC did not reveal the figure for those who claimed using other methods such as a letter or P87 form.