Working from home wherever possible has been a hallmark of the measures used to battle the coronavirus pandemic throughout 2020. However, the policy regarding the tax deduction available for doing so has been the subject of a lot of misinformation.


HMRC’s practice was to disallow the deduction (currently £6 per week) unless the employee is contractually required to work from home by their employer on a full-time basis. It has now been announced that all employees (and directors) will be able to claim the deduction, even if they are only working from home one day per work, for example where the workplace is open but staff are only attending on alternate days to help with social distancing etc. The change in practice is retrospective, so affected employees can claim for all of 2020/21, as well as the period in March 2020 that the government first issued the advice to work from home wherever possible.

Trap. This has been misinterpreted by some to mean that the allowance is available regardless of whether the employee was working from home for the full year. Ensure clients are aware that it can only be claimed for weeks that the employee was actually working. This could affect clients who have rotated staff in and out of furlough, for example.

Employees can claim the £6 per week allowance even if they only work from home on one day of the week. Ensure they are aware that they can only claim for weeks they were actually working though.

This article has been reproduced by kind permission of Indicator – FL Memo Ltd. For details of their tax-saving products please visit www.indicator-flm.co.uk or call 01233 653500.