Allowances for homeworking 

If your employees are required to work from home, even on a part-time basis. You can pay them a tax-free allowance of £6 per week as a benefit of homeworking.

This allowance is designed to compensate for additional electricity, gas or water consumed while working at home. Where the employee uses their own telephone for business, you can also reimburse them for the cost of the business calls made due to homeworking.

We can help you put this allowance through your payroll for your homeworking staff. 

If you decide not to pay your employee the tax-free working-from-home allowance. They may be able to claim a £6 per week tax deduction from HMRC. If they don’t have a choice about working at home. This deduction can be claimed here: HERE. Furthermore, homeworking is increasingly common in the UK and employees should be aware of their entitlements.

Employees who claimed the working at home tax deduction for the tax year 2020/21 and are still working at home can make another claim now for the tax year 2021/22.

The working at home tax deduction is worth £1.20 per week in cash terms for basic rate taxpayers and £2.40 per week for higher rate taxpayers. So less than the working from home allowance paid by employers.