Directors and business owners who claim the £312 flat rate per year (£6 per week) for working from home should be aware of a key policy change from HMRC, effective 14 October 2024. Going forward, claims for this relief must be supported by a formal obligation to work from home, such as a clause in a service agreement, contract, or board resolution.
This change represents a shift from previous practice, where many directors and employees could claim the relief on a discretionary or informal basis. HMRC is now tightening its stance — and the lack of documented obligation will invalidate claims.
🔍 What’s Changed?
From 14 October 2024, HMRC will only accept P87 claims for homeworking expenses if there is written evidence that the employee or director is contractually required to work from home.
The key requirements include:
- A written agreement (e.g., employment contract, service agreement, or board resolution).
- A regular and frequent homeworking pattern, typically as a guide at least two days per week, though not necessarily on the same days. The days are not specified in Evidence required to claim PAYE (P87) employment expenses – GOV.UK
- Voluntary or informal homeworking arrangements no longer qualify.
✅ What Does This Mean for Directors?
If you’re a limited company director working from home, you should:
- Update your service agreement or contract to include a homeworking clause.
- Pass a board resolution confirming the homeworking requirement.
- Ensure the arrangement is regular and necessary for business purposes.
- Retain all documentation as part of your company’s formal records.
✍️ Sample Wording for Compliance
To help you stay compliant, below is a model clause that can be included in a service agreement or board resolution:
📄 Homeworking Requirement – Example Clause
“The Company requires the Director to work from their home address at [insert address] for a minimum of [insert number] days per week. This arrangement is a condition of employment and is necessary for the proper performance of the Director’s duties. The Director’s home is deemed an official workplace for the purposes of fulfilling their role and responsibilities. The Company will review this arrangement annually, but it will remain in place unless varied in writing by mutual agreement. The Director must ensure that their homeworking environment is suitable for conducting business and agrees to be available and contactable during normal business hours on homeworking days.”
🗂️ Supporting Board Resolution – Example
“At a meeting of the Board of Directors held on [insert date], it was resolved that [Name of Director] is contractually required to work from home at least [insert number] days per week as part of their duties for the Company, with effect from [insert date]. This resolution is to be retained with the Company’s records as evidence of the homeworking requirement.”
💡 Claims Above £312?
If actual costs exceed the £6 per week flat rate, higher claims may be allowable, but these will require:
- Strong supporting documentation, and
- In some cases, pre-approval from HMRC.
🛠️ Next Steps
If you currently claim the flat rate and do not have documented homeworking requirements in place:
- Review your existing contracts.
- Draft a resolution or contract amendment now.
- Contact Bicknell Business Advisers for assistance in formalising the arrangement.
