WfH tax relief for 2022/23?

On-the-coast

I expect that unless the government mandates working from home at any point in tax years April 2022 and onwards, this small tax break is now history for the vast majority.  

Where companies now chose to implement hybrid working it’s up to them to manage the costs and benefits (and insurance, ergonomics, health, safety etc. all things which were largely ignored for most when emergency measures were in place)

Jeremy535897

Grumpy_chap said:

Jeremy535897 said:

EIM 32790 also explains what is meant by "choosing" to work from home.

None of those examples really seem to cover the type of "hybrid" working that will come in for many going forwards. 

I am currently working for a company where the business has not yet returned to the office.  During the COVID period, one of the offices has been closed and the remaining office is not large enough for everyone to attend so the proposal is that, from 4th April (earliest, subject to COVID status and other factors) everyone will hot desk to be in the office 2 days per week and WFH the remainder, but with exceptions that those who need to be in the office more because of mental health issues or inadequate facility to WFH will be able to work from the office full time with prior agreement (implication being these would be by exception).

I think, essentially, the EIM has simply not been updated to reflect such matters.

It may well be moot as, given 4th April is very near and there is not yet a plan for anyone returning to the office, schedule of who does what days, and rising COVID infections, the business will likely defer the return to office again.

I don't agree. If, due to constraints of space (or indeed for any other business led reason), an employer requires an employee to work from home for 2 days a week, as opposed to the employment contract simply reflecting the employee's choice to work from home, then those 2 days a week will qualify for relief. For 2020/21 and 2021/22, that would have entitled the employee to relief for the whole year, including the 3 days spent in the office, due to the easement. The understanding was that this easement was due to cease with effect from 6 April 2022, but the EIM casts doubt on this date.

Grumpy_chap

Jeremy535897 said:

Grumpy_chap said:

Jeremy535897 said:

EIM 32790 also explains what is meant by "choosing" to work from home.

None of those examples really seem to cover the type of "hybrid" working that will come in for many going forwards. 

I am currently working for a company where the business has not yet returned to the office.  During the COVID period, one of the offices has been closed and the remaining office is not large enough for everyone to attend so the proposal is that, from 4th April (earliest, subject to COVID status and other factors) everyone will hot desk to be in the office 2 days per week and WFH the remainder, but with exceptions that those who need to be in the office more because of mental health issues or inadequate facility to WFH will be able to work from the office full time with prior agreement (implication being these would be by exception).

I think, essentially, the EIM has simply not been updated to reflect such matters.

It may well be moot as, given 4th April is very near and there is not yet a plan for anyone returning to the office, schedule of who does what days, and rising COVID infections, the business will likely defer the return to office again.

I don't agree. If, due to constraints of space (or indeed for any other business led reason), an employer requires an employee to work from home for 2 days a week, as opposed to the employment contract simply reflecting the employee's choice to work from home, then those 2 days a week will qualify for relief. For 2020/21 and 2021/22, that would have entitled the employee to relief for the whole year, including the 3 days spent in the office, due to the easement. The understanding was that this easement was due to cease with effect from 6 April 2022, but the EIM casts doubt on this date.

Thank you.

I suspect the simple application will cease at the end of this tax year.

BUT, I also understand that the current rules are you either qualify for a week or don't qualify for a week as WFH and the £6 weekly allowance possible.  It does not seem to be reported down to the daily level:
https://www.gov.uk/tax-relief-for-employees/working-at-home

On that basis, the many people that will now be into some kind of hybrid working 2 or 3 days in office and remainder WFH (where that is the business decision, not employee choice) will be able to claim the £6 per week for every week except for annual leave (when you are not working).

I wonder whether the rules will change on this in the future?  It was a little-known and likely rarely claimed tax allowance that is now likely to be claimed with far greater frequency going forward.  For many claiming the allowance, the cost of WFH is less than the cost of commuting (especially if time is also considered).

Jeremy535897

I suspect the answer will be that you review the number of days you had to work from home after the tax year has ended, and divide by 5, to get the correct number of weeks to claim. I agree that it is cumbersome.

Grumpy_chap

Thanks Jeremy,
That could be how it works but is rather cumbersome and probably too complex for HMRC..  
I guess we just have to wait a few weeks until the updated EIM is available, which will, presumably, be a reversion to whatever the EIM said before COVID.

withaspritz

Hi, interesting reading this! I am now fully working from home, for good. Started WFH full time in March 2020 as did many others, but the company I work for have confirmed we will be working from home for good.

However, I do still have an office based contract. 

Would I qualify in 2022-23 for claiming "the old fashioned way"?  Presumably the old fashioned way is to ask HMRC to send a self assessment form?

Jeremy535897

If you don't need to complete a self assessment return, you use a form P87.

If you are required to work from home by your employer, you should receive an amended contract of employment.

withaspritz

Jeremy535897 said:

If you don't need to complete a self assessment return, you use a form P87.

If you are required to work from home by your employer, you should receive an amended contract of employment.

Thanks for the help. New starters get a WFH contract, however us "old timers" haven't got an updated one. I asked our HR Business Partner and got told it's not a priority to update existing contracts to a WFH one. Is there some legislation I should point out that would require this to be updated? Would lack of a WFH contract, scupper a claim on a P87?  Appreciate your help!

Jeremy535897

Section 336 ITEPA 2003 allows a deduction for expenses (excluding travel, which is treated differently) as follows:

"(1)The general rule is that a deduction from earnings is allowed for an amount if—

(a)the employee is obliged to incur and pay it as holder of the employment, and

(b)the amount is incurred wholly, exclusively and necessarily in the performance of the duties of the employment."

Where working from home expenses are concerned, the obligation to incur them only arises where the employee has to work from home. That may be because of the nature of the job, or because the employer provides no other place of work. HMRC will normally expect to see evidence of the requirement, and that evidence is normally in the contract of employment.

In your case, your written contract has been varied orally, and so if HMRC insist on seeing evidence, the HR business partner will no doubt be prepared to confirm the situation to them.

norsefox

Jeremy535897 said:

Section 336 ITEPA 2003 allows a deduction for expenses (excluding travel, which is treated differently) as follows:

"(1)The general rule is that a deduction from earnings is allowed for an amount if—

(a)the employee is obliged to incur and pay it as holder of the employment, and

(b)the amount is incurred wholly, exclusively and necessarily in the performance of the duties of the employment."

Where working from home expenses are concerned, the obligation to incur them only arises where the employee has to work from home. That may be because of the nature of the job, or because the employer provides no other place of work. HMRC will normally expect to see evidence of the requirement, and that evidence is normally in the contract of employment.

In your case, your written contract has been varied orally, and so if HMRC insist on seeing evidence, the HR business partner will no doubt be prepared to confirm the situation to them.

You'd also expect that such decisions are communicated to teams through memos/email circulars, so though not a contract, instructions to that effect will be available to present to HMRC should it be required.

My employer is doing something similar (four-day fortnight, or some gubbins).  We've had a lot of verbal discussions, but given the office is still closed, nothing official has been shared yet.

And like the poster above, none of our contracts have been amended, and I doubt it will ever happen.  Employers, irrespective of their obligations, will not regard this as a priority.