Share this content

Is 52x home use claim allowed if left employment?

Special rules - can client claim £6 use of home all year, if left employment part way through 20/21?

Didn't find your answer?

Hi, a client left employment before the end of 20/21 but feels the new coronavirus rules on homeworking allow him to claim £6 for the full 52 weeks anyway. I believe that the claim would still be limited to weeks when actually an employee. Could anybody please point me to legislation or HMRC guidance that would support my view? thank you.

Replies (44)

Please login or register to join the discussion.

avatar
By mikeyban
01st May 2021 14:20

My understanding is that you receive it for the whole year...

Thanks (1)
Replying to mikeyban:
avatar
By sunshine
01st May 2021 16:52

Thank you - but where you leave employment eg to become self-employed half way through the year, you can claim job expenses for a period when you weren't an employee?
Isn't the rule just intended to avoid having to make part year claims, if you only had to work part of the year at home?

Thanks (0)
Replying to sunshine:
avatar
By Hugo Fair
01st May 2021 16:57

The same allowance is available to someone who is self-employed (subject to the same eligibility criteria) as it is to an employee.

Thanks (1)
Replying to Hugo Fair:
avatar
By sunshine
01st May 2021 18:36

Thank you - yes, but there's a big gap before self-employment starts.

Thanks (0)
Replying to sunshine:
avatar
By Hugo Fair
01st May 2021 19:42

You seem to be searching for a reason to 'disallow' (part of) your client's claim, rather than accepting the answers you're getting.

And, as Paul says further down, the amount in question is trivial. Even if you're now hinting at say a 3-month gap between employment and self-employment, the amount you want to 'refuse' would only be £15.60 ... and that's IF you can find something concrete to back up your assertion.

Finally, you question whether this is what "the rule intended". As you must know by now, intentions aren't the point ... legislation (or guidance in its absence) is whatever it says - subject to interpretation by the courts (who won't get out of bed for a sum this insignificant).

Thanks (2)
Replying to Hugo Fair:
avatar
By Software Seeker
05th May 2021 14:01

Hugo Fair wrote:

The same allowance is available to someone who is self-employed (subject to the same eligibility criteria) as it is to an employee.

Is it?

Thanks (0)
Replying to Software Seeker:
avatar
By Hugo Fair
05th May 2021 15:39

Yes ... see https://www.gov.uk/expenses-if-youre-self-employed and then https://www.gov.uk/simpler-income-tax-simplified-expenses

Note: I specifically said someone who is self-employed - as 'simplified expenses' cannot be used by limited companies or business partnerships involving a limited company.

Thanks (1)
Replying to Hugo Fair:
avatar
By Software Seeker
05th May 2021 16:38

Are they? I thought the wfh flat rates were different.

Thanks (0)
Replying to Software Seeker:
avatar
By Hugo Fair
05th May 2021 18:00

Yes and No. The difference is that the 'employee' scheme is binary (the £6 pw is on or off); whereas the self-employed is capped at the same level (£6 pw) but has other flat rates if you only work from home for 25-50 hrs/mth or for 51-100 hrs/mth.
Mea Culpa.

Thanks (1)
avatar
By mikeyban
01st May 2021 14:22

Deleted as sent twice

Thanks (0)
avatar
By Hugo Fair
01st May 2021 16:55

I'm sure you probably already know (most of) this, but:

1. The 'working from home allowance' (in it's current incarnation) is an HMRC dispensation, so is not supported by statutory legislation. Their current (very limited) guidance can be found at https://www.gov.uk/tax-relief-for-employees/working-at-home

2. The allowance is an option. There is nothing to stop any taxpayer claiming a different sum (including a higher amount) IF the circumstances warrant it and IF the supporting evidence for the claim can be provided.

3. The allowance is intended to simplify the claim (for taxpayer and HMRC) by being a flat-rate, without the need for evidence of the claimed expenditure. However it does still have to meet basic eligibility criteria - such as:
"You may be able to claim tax relief for additional household costs if you have to work at home on a regular basis, either for all or part of the week. This includes if you have to work from home because of coronavirus (COVID-19).
BUT you cannot claim tax relief if you choose to work from home."
In other words, WFH has to have been enforced upon the taxpayer, not just be a personal or lifestyle choice.

4. The £6 pw (or £312 pa) of the flat-rate allowance is an allowance of tax relief, not a sum payable to the taxpayer. In the majority of cases it will be 'worth' only £1.20 pw to the individual in net cash.

5. Your OP question remains unresolved in the official GOV.UK guidance ... indeed their online claim calculator asks no questions about that aspect.
However, it has been stated in several HMRC emails/announcements that the current dispensation will be taken to apply to the whole year of claim (not applied only to any relevant weeks as was the case prior to the Covid-19 relaxation).

Hope that helps. As so often the case, a simple question can't have a simple answer!

Thanks (2)
avatar
By Paul Crowley
01st May 2021 18:26

The tax effect is so small that not worth HMRC's time to monitor
They have bigger fish to fry

Thanks (0)
Replying to Paul Crowley:
avatar
By sunshine
01st May 2021 18:52

Agreed, not really worth worrying about - I just hate to put the wrong amount on a return and it's very annoying not even knowing what the correct amount is.

Thanks (0)
Replying to sunshine:
avatar
By Not Anonymous
01st May 2021 20:29

sunshine wrote:

Agreed, not really worth worrying about - I just hate to put the wrong amount on a return and it's very annoying not even knowing what the correct amount is.

Is this sufficient to put your mind at rest?

https://www.icaew.com/insights/tax-news/2021/april-2021/wfh-tax-relief-c...

Thanks (0)
Replying to Not Anonymous:
avatar
By sunshine
02nd May 2021 19:09

Thank you for the link, but I think this just states the general rules rather than addressing this particular situation.

Thanks (1)
Psycho
By Wilson Philips
02nd May 2021 09:36

The amounts don’t warrant full research but my understanding is that the reference to the full year is simply to avoid having to identify periods when the employee is not working at home (ie should they happen to be in the office etc from time to time).

I haven’t seen anything (but I haven’t looked very hard) that suggests that the allowance is available for periods when the individual is not working at all.

Thanks (1)
Replying to Wilson Philips:
Psycho
By Wilson Philips
02nd May 2021 10:11

But do first principles not apply in any case? The £6 is either the amount that the employer can pay the employee tax-free - he’s unlikely to make the payment if the worker is no longer employed, or it is the amount that the employee can claim as a tax deduction provided that certain conditions are met. Again, those conditions are unlikely to be met for periods where there is no employment or self-employment.

Thanks (4)
Replying to Wilson Philips:
avatar
By Hugo Fair
05th May 2021 18:17

"But do first principles not apply in any case?"

Possibly they should, but apparently not in practice.
A non-scientific survey of neighbours (those who don't complete an SA return) shows that typically:
* They've gone to the HMRC online claim form (as advised by that lovely fella at Money Saving Expert dot com);
* Completed it in less than a minute;
* Received an adjusted tax code from HMRC (based on a whole year's claim).

Although the sum is small, they all said it was the easiest thing they'd ever done "to do with tax". None of them asked whether it mattered that they were only part-time (and I doubt any worried about losing their job later in the year) ... so, given no SA return, they've got the full year's worth with no way of stopping it until the next tax year (and no doubt next claim)!

Unfortunately (and that is the whole nub of this thread) there are few 'conditions to be met' - and they make no mention of the impact of breaks in employment.

Thanks (1)
Replying to Hugo Fair:
avatar
By Tax Dragon
05th May 2021 18:37

Hugo Fair wrote:

...they make no mention of the impact of breaks in employment.

Erm, no (employment) income, no PAYE, no relief via the tax code. I've already made that point.

Thanks (0)
Replying to Tax Dragon:
avatar
By Hugo Fair
05th May 2021 19:05

Sorry, lost your response in amongst the crazy links of this thread ...

I was talking about a "break in employment" (i.e. a period of unemployment between two employments). In that scenario (assuming the taxpayer retains a cumulative basis for their tax code), then the relief would indeed kick in again on commencement of the second employment (potentially with a nice tax rebate).

This is as opposed to the prevalent (and understandable) view on this thread that a portion of the allowance should have been 'removed' for the unemployed period ... by some mechanism (and under some rules) that don't appear to exist.

Thanks (0)
Replying to Hugo Fair:
avatar
By Tax Dragon
05th May 2021 19:17

One employer doesn't pass on the tax codes to the next, if that's what you mean.

Thanks (0)
Replying to Tax Dragon:
avatar
By Hugo Fair
05th May 2021 19:25

Yes they do - via the P45 (unless its across different tax years).
And even if the P45 is lost/delayed, HMRC's systems automatically issue a tax code notice to the new employer (after receiving an FPS with the individual on it for the first time), which will repeat the P45 code unless they've become aware of a major change to that individual's circumstances ... and the scenario under discussion here won't trigger such a change (because the tax code generating software was written eons before coronavirus had been thought of)!

Thanks (1)
Replying to Wilson Philips:
avatar
By sunshine
02nd May 2021 18:28

Thank you, exactly, this is my thinking also.

Thanks (0)
avatar
By Software Seeker
05th May 2021 13:56

I'm intrigued at how anyone can think that a) a wfh claim can be made for a period when an individual is not working due to unemployment, and b) it's OK to claim 'because the numbers are only small' and 'the taxman's got bigger fish to fry'. Regardless of the numbers, fraud is fraud, ain't it?

Thanks (0)
Replying to Software Seeker:
avatar
By Hugo Fair
05th May 2021 15:55

You may well be intrigued (as is the OP), but both your posits are false.

* "how anyone can think that a wfh claim can be made for a period when an individual is not working due to unemployment" ... but that's the whole point - the guidance from HMRC with regard to the current relaxation is silent on the matter of employment (or work of any sort being performed) and goes out of its way to state that the claim doesn't have to be pro-rated in any way but should be made for the whole year if it was valid to do so for part of the year.

* "how anyone can think that .. it's OK to claim 'because the numbers are only small' and 'the taxman's got bigger fish to fry'" ... but that's not what I've seen written by responders.
My point about the size of the claim was in the context of "intentions aren't the point ... legislation (or guidance in its absence) is whatever it says - subject to interpretation by courts (who won't get out of bed for a sum this insignificant)". That's not an inducement to commit fraud (which is what you appear to infer)!

The whole point of the OP question (and most of the responses) is that DESPITE the apparent illogicality it seems that it is valid (and certainly not fraud) for the client in OP to make a single claim for the whole tax year.
You may not like that but it doesn't entitle you to throw accusations of fraud around inappropriately.

Thanks (1)
Replying to Hugo Fair:
My photo
By Matrix
05th May 2021 16:18

I believe there is an assumption in the guidance that the employment continued for the whole year, albeit the employee didn’t work from home the whole year. I would not include such a claim for a client for the whole year anyway.

Thanks (1)
Replying to Matrix:
avatar
By Hugo Fair
05th May 2021 17:47

I agree that there was almost certainly "an assumption in the guidance" when it was drawn up. However at the moment the guidance is all we have - and it errs on the side of saying you should claim for the whole year not just parts of it (without mentioning concept of "employee (who) didn’t work from home the whole year").

FWIW, if you use their online claim facility (as you're encouraged to do) then there's no facility to pro-rate your claim.

And, at a deliberately facile level, where (in the absence of specific rules) would you draw the line:
* A person WFH full-time 5 days/wk, but doesn't work at weekend or evenings?
* Another person WFH but only 2 days/wk?
* Another person WFH but only on ad-hoc basis (when given work to do)?
* Another person WFH but takes a 6-week holiday in the middle of the year?
* Another person WFH but takes a 6-week break between employments?
... and so on ...

The lack of clear guidance, let alone proper regs, is annoying - but (at the risk of annoying Software Seeker again) it's not worth wasting all this time on it (which is not the same as encouraging people to make invalid claims if/when the rules are eventually made clear).

Thanks (1)
Replying to Hugo Fair:
My photo
By Matrix
05th May 2021 18:07

Under s336(1)(b) a payment is deductible if incurred...in the duties of the employment. All that has happened is that the employee can now claim this where not reimbursed by the employer. If there are no employment duties then I don’t see how a claim can be made (on the tax return as I wouldn’t be doing a claim outside the tax return).

Thanks (0)
Replying to Matrix:
avatar
By Hugo Fair
05th May 2021 18:42

I'm happy to bow to your deeper knowledge of the legislation (to which I only refer infrequently when seeking clarification on a specific issue) ... but this part of ITEPA is, as you say, about "a deduction from earnings."
Whereas I believe that the WFH tax relief is described as an "allowance."
By definition of being a tax relief it must indeed be deducted from earnings (as part of the tax calc), but isn't an allowance a different beast (if only because there's no need to attempt to tie it to any specific expenditure)?

Oh and, as mentioned in a separate post above, the majority of claims are expected to be made NOT on a tax return but via HMRC's online claim form (without reference to in-year pro-rating and with no expectation of post-year adjustment for a non-SA taxpayer).
I do understand the reluctance to claim (or facilitate a claim) in the circumstances described in OP, but why should SA be more costly than a valid on-line claim?

Thanks (0)
Replying to Hugo Fair:
avatar
By Tax Dragon
05th May 2021 19:15

The statutory rules are explained quite well via the ICAEW link above, if you care to look.

Thanks (0)
Replying to Tax Dragon:
avatar
By Hugo Fair
05th May 2021 21:08

Et tu, TD?
I had previously read the ICAEW 'article' - and had another look during the lifetime of this thread (although I can't say I cared so to do)!

It, like everything else on this topic (hence the opinion-based witterings from all concerned - including me - within this thread), simply paraphrases what they believe HMRC to have announced as this 'Covid-19 measure' (aka relaxation).
The references to actual statutory rules are only in the context of the 'normal' situation (prior to and possibly after the existence of the relaxation), so don't help to put any solid foundations under the missing rules (as per OP).
[Indeed none of the refs provided make any mention of Coronavirus, let alone the specific relaxation].

As I've said elsewhere, I don't disagree that it's illogical and the impact might even be unintentional ... but its just as likely to have been yet another 'temporary measure' as a political policy that (because the TIIN barely even registers on the Treasury's richter scale) was consciously 'allowed' as a matter of expediency.
Who knows for sure? I certainly don't - and I'm not sure we ever will!

Thanks (0)
Replying to Hugo Fair:
avatar
By Software Seeker
05th May 2021 16:47

Hold on there Hugo, dear chap. Sorry if I caused you offence. It's clear from the OP that the client left the employment. There's no way that a home as office claim can be valid for any periods where an employment doesn't exist. But happy to be corrected on this. And on the second point, I make a point of not entering claims when they're not valid. If I did, however small and apparently insignificant, then how would you view my actions?

Thanks (0)
Replying to Software Seeker:
avatar
By Hugo Fair
05th May 2021 17:32

No offence taken, but you're simply going round in ever decreasing circles.

*"There's no way that a home as office claim can be valid for any periods where an employment doesn't exist."
I agree that would be a logical position to take, but the whole point of this thread (indeed of the OP) is that there doesn't appear to be anything (SI, regs, guidance or whatever) to support your assertion ... and that what little has been found so far subverts it (if only by omission).
So it's not a matter of you being "happy to be corrected on this" ... more a matter of you providing the evidence to support your assertion (which I will then be only too happy to accept).

* Likewise "I make a point of not entering claims when they're not valid. If I did, however small and apparently insignificant, then how would you view my actions?"
As (attempted) fraud of course ... but only because you've placed a condition of "when they're not valid" on your action. Whereas, of course (and to repeat myself for the last time), there is as yet nothing to indicate that the specified claim (per OP) would not be valid.

I'm not sure why you persist in your pursuit of a 'false proof' when it is open to you to provide the evidence to support your assertion.

Thanks (1)
Replying to Hugo Fair:
avatar
By Software Seeker
05th May 2021 18:36

Ummm, still not convinced. "Well, yer honour, I didn't think I could claim because it just didn't feel right...after all, I'd gone on a round the world cruise after I'd got the sack and had some time on me hands, but my mate Hugo said that as it ain't specifically written down that I can't claim then I must be more able than not to claim, right?"

Thanks (0)
Replying to Software Seeker:
avatar
By Hugo Fair
05th May 2021 18:57

Just as well that I'm not a sensitive soul ... as you decide to personalise it all!

However, your storyline is a reasonable scenario ... that actually makes my point (albeit badly).
I never said if "it ain't specifically written down that I can't claim then I must be more able than not to claim." What I would've been happy to say (since we're making up quotes) is "it specifically says that I was eligible to claim AND doesn't give any indications of circumstances applicable to me that would cause that eligibility to cease."

FWIW I have no doubt that it was not the intention that the allowance should be available irrespective of periods of unemployment ... and I've not bothered to claim it for myself in my partial-retirement (more out of laziness than anything else).
However I'm happy to take an independent view of the facts as I see them (not as I might believe they should be for reasons of logic or fairness or whatever).

Thanks (1)
avatar
By Tax Dragon
05th May 2021 18:01

A link above says:

ICAEW understands that if an employee who has told HMRC that they are working from home returns to working in the office, there is no requirement for the employee to tell HMRC, so the relief can apply to the whole of the tax year.

But the claim outside self-assessment works by HMRC adjusting the tax code. So by definition, almost, relief will stop when the employment stops.

There's no basis demonstrated in this thread for claiming for the full year under SA.

Thanks (0)
Replying to Tax Dragon:
avatar
By Hugo Fair
05th May 2021 19:13

Oh how I wish I'd ignored this thread from the start!

"There's no basis demonstrated in this thread for claiming for the full year under SA" ... agreed. But nor is there any basis demonstrated for the opposite position - and the minimal amount of guidance (and format of HMRC's claim form) at least tends towards encouraging the 'all-year' claim.

Isn't it at least possible (I believe likely) that HMRC took one look at the effort involved in writing more guidance and more complicated software and decided (in the context of coping with CJRS, SEISS, etc) that it wasn't worth their while ... so made the claim rules as broad (if illogical) as they've turned out to be?

Thanks (0)
Replying to Hugo Fair:
My photo
By Matrix
05th May 2021 19:40

Why did you say earlier that it was only possible to claim for a whole year? You just compelled me to logon and you enter the amount for each claim so it can be partial.

Thanks (0)
Replying to Matrix:
avatar
By Hugo Fair
05th May 2021 20:50

I'm sorry if you feel I compelled you to do anything (especially on this rather boring topic that seems to have taken on a life of its own on this thread) ... but, if you mean the online claim form/process, then I've just gone there (via my govt gateway id) and worked my way through it - without encountering any question/suggestion of discrete periods within the tax year (2021-22) for the WFH part of the claim.
The parts of the form where "you enter the amount for each claim" are for other claims within the overarching Expenses Claim for Tax Year xxxx/xx.

Thanks (1)
avatar
By Not Anonymous
05th May 2021 21:05

I wonder what the op would do if they had,
• a client who is new to Self Assessment so had been able to use the HMRC microservice when it started last year and received an updated tax code including WFH expenses of £312.

• subsequently ceased in employment part way through 2020/21

• became self employed during 2020/21 with turnover in excess of £1,000

• has been sent a notice to file for 2020/21

Would they include WFH expenses of £312 on the return or apportion the £312 based on the period of time the employment existed in 2020/21??

Thanks (1)
Replying to Not Anonymous:
avatar
By sunshine
06th May 2021 11:12

I'd probably include the whole figure, as it was made in good faith complying with the rules at that time, so was a valid claim and was rightfully taken (at that point in time). That's different to making a retrospective calculation now though.

Thanks (0)
avatar
By Tax Dragon
06th May 2021 05:52

Here's the quote that MSE attributes to HMRC.

"We recognise that ongoing lockdown restrictions mean that many employees are still required to work from home for some or all of the time. Therefore, we're accepting claims for the full year's expenses for the 20/21 and 21/22 tax years for employees who are eligible. This includes customers claiming through self-assessment."

So you don't have to track when you had to work from home, when you could go back to the workplace, when you got sent home again... you can simply claim for the year. Even under SA.

But you do have to be working. Obviously. It's, frankly, fatuous to say otherwise. (The background law, as Matrix has pointed out, is s336. The background guidance, as ICAEW pointed out, is in EIM. The HMRC statement simply slots into that context ('first principles' as Wilson called it) and, in that context, there is zero ambiguity about this.)

Thanks (1)
avatar
By petestar1969
06th May 2021 10:42

Just let the client claim it, its trivial.

Much more important is all my S/E clients in construction claiming all the SEISS grants when they almost certainly weren't entitled to them.

Thanks (1)
Replying to petestar1969:
avatar
By sunshine
06th May 2021 11:22

Thanks petestar. Yes, I'll explain my view (in favour of restriction), but say that it's open to interpretation, so I won't change their figure. (I will apportion if it crops up again though, and the client isn't lobbying otherwise!)

Thanks (0)
Share this content