With more of us working from home, employees can now make a claim for tax relief to cover some of their costs while they are working remotely.

The previous rule for employees was that there had to be a home working arrangement with their employer under which they were required to work from home regularly to be paid £6 a week tax-free (£4 a week up to 5 April 2020). This rule has now been relaxed as a result of COVID-19 so that such arrangements are not currently required, and employees can claim tax relief directly from HMRC where their employer does not make the payments.

£312 a year tax-free is equivalent to £538 gross for a higher rate taxpayer. The payments are tax-deductible for the employer and not liable to national insurance contributions.

Where the employer does not make the payments to the employee there is a new claims portal on the HMRC website so that the employee who is working from home can claim to deduct £312 from their employment income. That would generate a £124.80 tax refund for a higher rate taxpayer or £62.40 if basic rate.

There is a similar tax break for the self-employed which provides a deduction from profits of up to £26 a month.